Nanoparticles of palladium were obtained with the help of hydrogen-oxidising, metal- reducing bacteria and used for the production of electricity in a proton exchange membrane (PEM) fuel cell. Earlier works have shown that palladised cells of Escherichia coli and Desulfovibrio desulfuricans (Bio-PdE.coli and Bio-PdD.desulfuricans, respectively) appeared similar by electron microscopy and were comparably active in a chemical test reaction. When tested in a PEM fuel cell they produced 0.018 and 0.108 W, respectively. Electron paramagnetic resonance analysis of Bio-PdE.coli mixed with activated carbon showed paramagnetic activity. However, Bio-PdD.desulfuricans under the same conditions quenched the intrinsic EPR signal. This quenching is indicative of the magnetic properties of the particles. The magnetic behaviour of Pd nanoparticles was theoretically predicted for particles between 10 and 20 nm in diameter and can be experimentally confirmed by EPR measurements.