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[Display omitted] • The non-homogenous AuPd alloy was synthesized by the LSPR effect of Au NPs within 250 s, and it exhibits excellent EOR activity in alkaline media. • The effective Pd precursor reduction is confined within a 2.5 nm shell region due to the large temperature gradient and ultra-short pulse duration. • The formation mechanism of AuPd alloy is investigated by experiment, FEM and MD simulations. Improving electrocatalyst performance is key to the large-scale application of fuel cells. Here, we constructed non-homogeneous AuPd alloy nanoparticles with excellent electrocatalytic activity based on the localized surface plasmon resonance (LSPR) effect of Au nanoparticles for the first time. The mass activity and specific activity of the non-homogeneous AuPd alloy for ethanol oxidation reaction can reach 18.14 A/mg Pd and 20.28 mA cm−2, respectively, 10.67 and 3.75 times higher than that of commercial Pd/C. Experimental characterizations and theoretical simulations show that Pd precursor is reduced and deposited on the surface of Au NPs, and the localized temperature field drives the atomic interdiffusion. Finite element simulation results indicate a large temperature gradient around the laser-irradiated Au NPs, and the effective reduction of the Pd precursor is confined to the 2.5 nm thick shell region. This work demonstrates the heterogeneous nucleation and growth of nanocrystals driven by LSPR, providing a promising strategy for the rational design of bimetal nanoparticles. [ABSTRACT FROM AUTHOR]