Laser-induced breakdown spectroscopy (LIBS) using conditional data analysis was applied to aqueous suspensions of palladium particles in the reformate water of palladium-based proton exchange membrane fuel cells. A significant amount of palladium was found in the water, indicating degradation of the fuel-cell cathode catalytic layers. The palladium particle-size detection limit was found to be about 400 nm. Calibration procedures to quantify the palladium concentration are discussed.