Aqueously well-dispersed NiPd nanoparticles with a dimension of about 30 nm were prepared by a modified polyol reduction process, using glycol as both solvent and reductant, and PVP as stabilizing agent. The as-synthesized nanoparticles with different composition were characterized by XRD, ICP and TEM. It is proved that the nanoparticles are NiPd alloy, and the PVP prevents them from agglomeration and oxidation. The magnetic properties and heat effect under external alternating magnetic field reveal that the obtained NiPd nanoalloy is ferromagnetic material and has bigger coercive force; additionally, the saturation magnetization and heat generation ability of the nanoalloy are improved by the increasing of Ni content. When the nanoparticles were exposed to an external alternation magnetic field of 60 kHz and 7.5 kA/m, the samples show high heat generation ability, with the suspension temperature increasing by 14 ℃.