In the present work, a recently developed three-body potential and a new two-body model potential are first used, as an application, to investigate the dynamical behaviour of fcc Fe-28%Pd alloy. For this purpose, two- and three-body interactions have been employed to develop the dynamical matrix of fee structure. The parameters defining the two- and three-body potentials for Fe and Pd have been computed following a new procedure described by Akgun and Ugur. In this scheme, the input data for evaluating the necessary parameters is independent of the phonon frequencies and elastic constants of the alloy and metals. The force constants of the alloy have been calculated by the concentration averages of the computed force constants of the component metals. Finally, the phonon frequencies of the alloy along the principal symmetry directions have been calculated from the elements of the matrix so developed. The theoretical results have been found to be in good agreement with the corresponding experimental values.