Hydrogen interaction with defects and structural development of Pd films with various microstructures were investigated. Nanocrystalline, polycrystalline and epitaxial Pd films were prepared and electrochemically loaded with hydrogen. Structural changes of Pd films caused by absorbed hydrogen were studied by in-situ X-ray diffraction combined with acoustic emission and measurement of electromotorical force. Development of defects during hydrogen loading was investigated by positron annihilation spectroscopy. It was found that hydrogen firstly fills open volume defects existing already in the films and subsequently it occupies also interstitial sites in Pd lattice. Absorbed hydrogen causes volume expansion, which is strongly anisotropic in thin films. This introduces high stress into the films loaded with hydrogen. Acoustic emission measurements revealed that when hydrogen-induced stress achieves a certain critical level rearrangement of misfit dislocations takes place. The stress which grows with increasing hydrogen concentration can be further released by plastic deformation and also by detachment of the film from the substrate.