The progress of electroless deposition of palladium around the pore area at surface of porous stainless steel was recorded in order to understand membrane formation and to control the membrane quality. A bridge structure is formed during the membrane formation around the pore area of the substrate. The porous substrate was modified to be smooth using micro-or nano-size metal or metal oxide particles in order to make sure that palladium membrane is strongly supported by the substrate and as the result the membrane thickness can be further reduced. The experimental results obtained from hydrogen permeation through the palladium membranes having the thickness from 400 nm to 18 m demonstrate that these thin membranes are solid and they can be used at the temperature of 550°C and hydrogen pressure difference of 350 kPa. The proposed processing will allow optimizing the design and fabrication of thin palladium membranes for hydrogen separation.