Palladium oxide (PdO) nanoparticles (similar to 20-130 nm) are synthesized using sol gel method. The crystal structure of PdO is determined using X-ray diffraction (XRD) whereas surface morphology, shape and size of PdO nanoparticles are analyzed using scanning electron microscopy and transmission electron microscopy. The optical band gap is estimated as 1.8 eV using UV Vis spectroscopy. The effect of hydrogen gas at low pressure (25, 50, 75 and 100 mbar) on palladium oxide nanoparticle is studied using In -situ X-ray diffraction at room temperature. It is found that face centered cubic (fcc) palladium hydride (PdHx) crystal structure is formed and the intensity of peaks representing tetragonal PdO (t-PdO) crystal structure almost vanished as the pressure increased to 100 mbar. Also, it is found that the value of lattice constant increased significantly, when the pressure becomes equivalent to 100 mbar due to phase transition (alpha-beta) in PdHX lattice. It shows that PdO nanoparticles can be used for storage and sensing of hydrogen gas at ambient atmosphere. (C) 2016 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.