Effects of stress and defects on the hydrogenation and magnetic properties of (111) fiber-textured palladium cobalt Pd92Co8 (at.%) alloy films are investigated using post-annealing process. It is revealed that the hydrogen stabilization due to tensile stress induces various effects on hydrogenation. Defect removal results in an increased solubility limit for the metallic a-phase and an increased critical hydrogen pressure to form the hydride beta-phase. It was demonstrated that the local strain can depict these effects using a linear function. The improved resistance against film buckling is also attributed to the defect removal. Thus, post-annealing is a powerful process to control hydrogenation; however, the effects are complicated because various effects work in conjunction. In contrast, the magnetic properties can be explained in simple terms. The saturation magnetization corresponds linearly to the defect concentration with a negative slope, and the magnetic anisotropy is proportional to the stress due to magnetoelastic coupling. (C) 2020 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.