Alloying palladium (Pd) with other transition metals at the nanoscale has become an important pathway for preparation of low-cost, highly active and stable catalysts. However, the lack of understanding of how the alloying phase state, chemical composition and atomic-scale structure of the alloys at the nanoscale influence their catalytic activity impedes the rational design of Pd-nanoalloy catalysts. This work addresses this challenge by a novel approach to investigating the catalytic oxidation of carbon monoxide (CO) over palladium-nickel (PdNi) nanoalloys with well-defined bimetallic composition, which reveals a remarkable maximal catalytic activity at Pd:Ni ratio of ∼50:50. Key to understanding the structural-catalytic synergy is the use of high-energy synchrotron X-ray diffraction coupled to atomic pair distribution function (HE-XRD/PDF) analysis to probe the atomic structure of PdNi nanoalloys under controlled thermochemical treatments and CO reaction conditions. Three-dimensional (3D) models of the atomic structure of the nanoalloy particles were generated by reverse Monte Carlo simulations (RMC) guided by the experimental HE-XRD/PDF data. Structural details of the PdNi nanoalloys were extracted from the respective 3D models and compared with the measured catalytic properties. The comparison revealed a strong correlation between the phase state, chemical composition and atomic-scale structure of PdNi nanoalloys and their catalytic activity for CO oxidation. This correlation is further substantiated by analyzing the first atomic neighbor distances and coordination numbers inside the nanoalloy particles and at their surfaces. These findings have provided new insights into the structural synergy of nanoalloy catalysts by controlling the phase state, composition and atomic structure, complementing findings of traditional density functional theory studies.