In this paper we present selective hydrogen sensor for application working in methane presence. Our sensor is based on C-Pd films prepared by physical vapor deposition (PVD) method. The morphology and topography of these films were characterized using SEM and TEM techniques. The sensor evaluation was performed in gas containing different hydrogen concentrations in N2/CH4 mixture. For comparison the changes of films response for H2/N2 mixture were also measured. It was found that C-Pd films selectively detected hydrogen in the presence of methane in the surrounding atmosphere. Furthermore, CH4 presence does not affect the kinetics of interaction of hydrogen with the C-Pd films.