A series of bimetallic Pd–Ag/SiO₂ catalysts were prepared by galvanic displacement with increasing loadings of Pd on Ag. The catalysts were characterized by atomic absorption spectroscopy, Fourier-transform infrared spectroscopy of CO adsorption and X-ray photoelectron spectroscopy. An actual Pd deposition beyond the theoretical limit for galvanic displacement suggested that the large difference in surface free energy for Pd and Ag resulted in Pd diffusion into the bulk of Ag particles, or Ag diffusion to the surface to provide fresh Ag atoms for further galvanic displacement. Characterization results indicated that on this series of catalysts the Pd atoms are distributed in very small ensembles or possibly even atomically on the Ag surface, and there was a transfer of electrons from Pd to Ag at all Pd loadings. For comparison, the catalysts were also evaluated for the selective hydrogenation of acetylene in excess ethylene at the conditions used in our previous study of the reverse Ag–Pd/SiO₂ catalysts. The selectivities for C₂H₄ formation remained high and constant due to the geometric effects that Pd atom existed as small ensembles. However, the electronic effects resulted in lower selectivities for C₂H₄ formation than those from the catalysts with high coverage of Ag on Pd.