While bottom-up synthetic strategies for the formation of near-monodisperse clusters have attracted much attention, top-down synthetic strategies in which metals are dispersed into clusters can also be viable. In this study, we follow up previous work that showed the formation of Ag clusters dispersed in a silica matrix by breaking up larger triangular Ag nanoparticles upon calcination in air. AgPd bimetallic catalysts were synthesized via a galvanic replacement reaction of these thermally activated Ag clusters in a silica matrix. The galvanic reaction of the Ag clusters with Pd(II) salts was monitored by in situ XANES spectroscopy. Interestingly, extended X-ray absorption fine structure (EXAFS) spectroscopy and X-ray photoelectron spectroscopy (XPS) studies suggested that the majority of the Ag atoms are located on the surface of the resulting clusters and Pd atoms are in the core region. The catalytic activity for 3-hexyne-1-ol hydrogenation was investigated and the AgPd@SiO₂ catalysts showed superior selectivity for the selective hydrogenation to 3-hexene-1-ol.