Supercritical flow technology was used for the one step production of PtPd and PtPdFe nanoparticles supported on high surface area γ-Al2O3. Fe addition to PtPd nanoparticles enhanced the propene oxidation activity of the fresh catalysts. For instance, the turnover frequency of a catalyst with 0.12 wt% Fe was 0.06 s-1 at 120 °C, three times higher than the analogous PtPd catalyst. Fe was also incorporated as a substitute element for the PtPd precious metal content ((PtPd)x-yFey, x = 0.75 wt% and y = 0-0.25 wt%), and a relationship between the activity for propene oxidation and the ratio of Fe to PtPd was found. The optimum ratio in terms of activity was found for the (PtPd)0.65Fe0.10/γ-Al2O3 catalyst, allowing precious metal savings of 19% when compared to the PtPd/γ-Al2O3 commercial reference catalyst. Additionally, the T50 (temperature of half conversion) for propene oxidation was lowered by 10 °C under fresh conditions and 20 °C, after hydrothermal aging (750 °C/3h, 10% O2, 10% H2O). Synchrotron X-ray powder diffraction showed that Fe incorporation causes contraction of the PtPd lattice, implying that the PtPdFe alloy formation is responsible for the improved propene oxidation activity. Even after aging, the lattice remained contracted suggesting that the alloyed nanoparticles are stable under the harsh operating conditions of catalytic converters. The lattice contraction effect can be associated with the propene oxidation kinetics, leading to a weaker binding of oxygen on the PtPdFe nanoparticle surface, which can induce a higher surface reaction rate.