The hard magnetic L10 ordered phase formation in thin Pd and Fe bilayers prepared on MgO (001) substrate has been investigated by transmission electron microscopy using in situ annealing. The structures of as-deposited Fe/Pd and Pd/MgO interfaces were characterized by high-resolution transmission electron microscopy. Fast intermixing of Fe and Pd layers and immediate L10 phase formation within the alloyed area was found at 673 K. The high-resolution observations indicated that the ordered region of the L10-FePd phase was formed in dispersed areas without a predetermined nucleation site. At 773 K, the growing ordered areas occasionally formed antiphase boundaries between the adjacent parts. The ordered L10-FePd thin layer contained translational domains with tetragonal c axis perpendicular to the substrate.