The exact conditions for deposition of pure palladium and pure silver membranes as well as simultaneous, co-deposition of palladium and silver have been identified for a hydrazine-based plating bath containing both palladium and silver precursors. The electroless plating kinetics have been determined for co-deposition of palladium and silver from the mixed plating bath. A mathematical model has been developed to predict the film thickness, plating rate and composition profile as a function of plating parameters (i.e., reactant concentrations and time). The evolution of the microstructure and composition of the film during electroless plating has also been investigated. A hydrogen permeation study has demonstrated that the Pd-Ag alloy membrane has superior performance compared to a pure palladium membrane of similar thickness. In addition, the formation of a single-phase alloy results in substantial enhancement in the hydrogen permeation rate.