Carbon-supported platinum-iron catalysts were fabricated and characterised by means of scanning electron microscopy, energy-dispersive X-ray system and X-ray diffraction. The catalysts were tested in electrochemical half cells for oxygen reduction using voltammetry and steady-state polarisation measurements and in direct methanol fuel cells. Use of PtFe/C cathodes, instead of a Pt/C cathode, partially suppressed methanol oxidation and led to higher net oxygen reduction currents in the presence of methanol. Consequently, an increase in power density up to 30% was achieved in direct methanol fuel cells with PtFe/C cathodes, compared to that with Pt/C cathode. The influence of alloy composition and operation conditions on the cell performance has been investigated.