Stable vanadium/rhodium subsurface alloys can be obtained by annealing vanadium metal overlayers on polycrystalline rhodium at elevated temperatures (greater than or equal to 773 K). Their peculiarity is a purely rhodium-terminated surface with vanadium atoms positioned in the near-surface layers. Their structure and composition depend on the nominal vanadium coverage and on the sample temperature during preparation. In the present contribution the formation of the vanadium/rhodium subsurface alloy was studied in detail and the kinetics of CO hydrogenation on its surface was measured in situ at the different stages of alloy formation. In particular, the transition from "on-top" vanadium to the subsurface alloy state and finally to the bulk solution has been monitored with the help of Auger electron spectroscopy and argon ion sputter profiling. Submonolayers of vanadium on top of the rhodium surface promote initially the CO hydrogenation, but are rapidly deactivated by oxide and carbide formation. Subsurface alloy formation sets in upon annealing at 773 K and is connected with a significant increase of the catalytic activity, a change in the selectivity, and a reduced catalyst deactivation. Increasing the annealing temperature to 950 K leads to a state with the subsurface layer (second Rh surface layer) saturated with vanadium and excess vanadium dissolved into the bulk. The formation and the catalytic properties of the (sub)surface alloys obtained at different temperatures are discussed in light of additional experiments regarding their chemisorptive properties and of recent theoretical calculations. (C) 2003 Elsevier Inc. All rights reserved.