Dispersion is a crucial issue in nanoparticle preparation, e.g., a nanocatalyst of a high surface−volume ratio. Unfortunately, most synthetic approaches strongly depend on an excessive amount of stabilizers and inactive supporting materials for nanoparticle dispersion, resulting in a serious loss of the active surface. In this research, an approach employing a Taylor vortex flow (TVF) is first reported to obtain the effective dispersion of nanoparticles in the synthesis. Completely dispersed nanoparticles of the CuPd alloy less than 5 nm were easily synthesized in a continuous Couette−Taylor (CT) reactor due to the strong and periodic shear field of TVF. Thus, 3.2 nm sized nanoparticles were synthesized at a rotation speed of 1200 rpm and a mean residence time of 2 min despite the use of at least 6−14 times less stabilizer compared with conventional synthetic approaches. However, large aggregates of nanoparticles are always produced in a conventional continuous stirring tank reactor (CSTR) even with a high concentration of stabilizer and a high agitation speed of 3000 rpm. Furthermore, we systematically examined the effect of various synthetic parameters such as rotating speeds, mean residence times, and concentrations of reagents and stabilizers on the dispersion and size of CuPd alloy nanoparticles. Moreover, the well-dispersed CuPd alloy nanoparticles prepared in the CT reactor exhibited enhanced electrocatalytic activity for formic acid oxidation (FAO) compared with CuPd aggregates prepared in CSTR.