Selective oxidations are crucial for the creation of valuable chemical building blocks but often require expensive and unstable stoichiometric oxidants such as hydroperoxides and peracids. To date, many catalysts that contain a single type of active site have not been able to attain the desired level of selectivity for partially oxidized products over total combustion. However, catalysts containing multiple types of active sites have proven to be successful for selective reactions. One category of such catalysts is bimetallic alloys, in which catalytic activity and selectivity can be tuned by modifying the surface composition. Traditional catalyst synthesis methods using impregnation struggle to create catalysts with sufficient control over surface chemistry to accurately tune the ensemble size of the desired active sites. Here we describe the synthesis of colloidal nanocrystals of dilute alloys of palladium and gold. We show that when supported on titania (TiO2), tuning the composition of the Pd/Au nanocrystal surface provides a synergistic effect in the selective oxidation of 2-propanol to acetone in the presence of H2 and O2. In particular, we show that certain Pd/Au surface ratios exhibit activity and selectivity far superior to Pd or Au individually. Through precise structural characterization we demonstrate that isolated atoms of Pd exist in the most active catalysts. The synergy between isolated Pd atoms and Au allows for the formation of reactive oxidizing species, likely hydroperoxide groups, responsible for selective oxidation while limiting oxygen dissociation and, thus, complete combustion. This work opens the way to more efficient utilization of scarce noble metals and new options for catalyzed selective oxidations.