We have investigated systematically the mechanistic aspects of the Ag-Pd bimetallic cluster formation within sodium bis(2-ethylhexyl) sulfosuccinate (AOT) reverse micelles by using in-situ X-ray absorption spectroscopy (XAS). A two-step sequential reduction method is employed for the synthesis of Ag-Pd bimetallic clusters. The first step involves preparation of Ag nanoclusters, by mixing the Ag+ ions containing the AOT microemulsion system with a reducing agent hydrazine (N2H4) containing the AOT microemulsion system. In the second step, the addition of Pd2+ ions to Ag nanoclusters led to the formation of Ag-Pd bimetallic clusters via the reaction between Ag nanoclusters and Pd2+ ions in AOT reverse micelles. The reduction of silver ions and the formation of corresponding Ag nanoclusters are monitored as a function of the dosage of the reducing agent, hydrazine. In-situ XAS allowed probing of the reaction between Ag nanoclusters and Pd2+ ions during the formation of Ag-Pd bimetallic clusters. Analysis of Ag and Pd K-edge XAS spectra reveals that in the final stage Ag-Pd clusters, in which "Ag" atoms prefer to be surrounded by "Pd" and "Pd" atoms prefer to be surrounded by "Pd", were formed. On the basis of XAS results presented here, we are able to propose a structural model for each step so that this work provides a detailed insight into the mechanism of nucleation and growth of Ag-Pd bimetallic clusters. We also discussed the atomic distribution of Ag and Pd atoms in Ag-Pd bimetallic clusters based on the calculated XAS structural parameters.