The robbery occurred at about 2 p.m. Saturday when two men approached the 80-year-old woman as she walked her 6-year-old Yorkie "Deuce" near Encinal Avenue and Fountain Street, police said.
One of the men simulated a gun and demanded both her purse and her dog. After she refused to hand them over, one suspect grabbed the dog as the other wrenched the purse from her grip, police Lt. Sean Lynch said.
Alameda police have located an image of the suspect vehicle captured at a gas station where the suspects used the victim's credit card shortly after the robbery.
Lynch said the car is a blue 1995 Oldsmobile Cutlass Ciera with a primer-colored left fender. The California license plate number is 3REL125.
The stolen dog is equipped with an identifying microchip, police said.
Donations to the reward fund can be made payable to "Deuce Reward" and mailed to the Bank of Alameda at 1416 Park St., Alameda, CA, 94501. The account number is 02017507.
Anyone with information on the identity of the suspects or is encouraged to contact the Alameda Police Department at (510) 337-8340.