We demonstrate a new approach for producing highly dispersed supported metal phosphide powders with small particle size, improved stability and increased electrocatalytic activity towards some useful reactions. The approach involves a one-step conversion of metal supported on high surface area carbon to the metal phosphide utilising a very simple and scalable synthetic process. We use this approach to produce PdP₂ and Pd₅P₂ particles dispersed on carbon with a particle size of 4.5–5.5 nm by converting a commercially available Pd/C powder. The metal phosphide catalysts were tested for the oxygen reduction, hydrogen oxidation and evolution, and formic acid oxidation reactions. Compared to the unconverted Pd/C material, we find that alloying the P at different levels shifts oxide formation on the Pd to higher potentials, leading to greater stability during cycling studies (20% more ECSA retained, 5k cycles) and in thermal treatment under air. Hydrogen absorption within the PdP₂ and Pd₅P₂ particles is enhanced. The phosphides compare favourably to the most active catalysts reported to date for formic acid oxidation, especially PdP₂, and there is a significant decrease in poisoning of the surface compared to Pd alone. The mechanistic changes in the reactions studied are rationalised in terms of increased water activation on the surface phosphorus atoms of the catalyst. One of the catalysts, PdP₂/C is tested in a fuel cell as anode and cathode catalyst and shows good performance.