Density functional theory calculations predict the surface segregation of Cu in the second atomic layer of Pd which has not been unambiguously confirmed by experiment so far. We report measurements on Pd surfaces covered with three and six monolayers of Cu using element selective positron-annihilation-induced Auger electron spectroscopy (PAES) which is sensitive to the topmost atomic layer. Moreover, time-resolved PAES, which was applied for the first time, enables the investigation of the dynamics of surface atoms and hence the observation of the segregation process. The time constant for segregation was experimentally determined to τ=1.38(0.21) h, and the final segregated configuration was found to be consistent with calculations. Time-dependent PAES is demonstrated to be a novel element selective technique applicable for the investigation of, e.g., heterogeneous catalysis, corrosion, or surface alloying.