The rational fabrication of Pt-free catalysts for driving the development of practical applications in alkaline water electrolysis and fuel cells is promising but challenging. Herein, a promising approach is outlined for the rational design of multimetallic catalysts comprising multiple active sites including Pd nanoclusters and Ru single atoms anchored at the defective sites of Ni(OH)2 to simultaneously enhance hydrogen evolution reactions (HER) and ethanol oxidation reactions (EOR). Remarkably, Pd12Ru3/Ni(OH)2/C exhibits a remarkably reduced HER overpotential (16.1 mV@10 mA cm−2 with a Tafel slope of 21.8 mV dec−1) as compared to commercial 20 wt.% Pt/C (26.0 mV@10 mA cm−2, 32.5 mV dec−1). More importantly, Pd12Ru3/Ni(OH)2/C possesses a self-optimized overpotential to 12.5 mV@10 mA cm−2 after 20 000 cycles stability test while a significantly decreased performance for commercial 20wt.% Pt/C (64.5 mV@10 mA cm−2 after 5000 cycles). The mass activity of Pd12Ru3/Ni(OH)2/C for the EOR is up to 3.724 A mgPdRu−1, ≈20 times higher than that of commercial Pd/C. Electrochemical in situ Fourier transform infrared measurements confirm the enhanced CO2 selectivity of Pd12Ru3/Ni(OH)2/C while synergistic and electronic effects of adjacent Ru, Pd, and OHad adsorption on Ni(OH)2 at low potential play a key role during EOR. © 2022 The Authors. Advanced Functional Materials published by Wiley-VCH GmbH.