Bimetallic nanoparticle (NP) catalysts are widely used in many heterogeneous gas‐based reactions because they often outperform their monometallic counterparts. During these reactions, NPs often undergo structural changes, which impact their catalytic activity. Despite the important role of the structure in the catalytic activity, many aspects of how a reactive gaseous environment affects the structure of bimetallic nanocatalysts are still lacking. Here, using gas‐cell transmission electron microscopy (TEM), it is shown that during a CO oxidation reaction over PdCu alloy NPs, the selective oxidation of Cu causes the segregation of Cu and transforms the NPs into Pd–CuO NPs. The segregated NPs are very stable and have high activity for the conversion of CO into CO2. Based on the observations, the segregation of Cu from Cu‐based alloys during a redox reaction is likely to be general and may have a positive impact on the catalytic activity. Hence, it is believed that similar insights based on direct observation of the reactions under relevant reactive conditions are critical both for understanding and designing high‐performance catalysts.