Structural analysis of high density H(D) absorbed Pd particles with 5 nm dispersed ZrO2 has been carried out using XAFS (X-ray Absorption Fine Structure) techniques. X-ray absorption spectra around the I'd K-absorption edge were observed and analyzed. The Pd-Pd bonding distance was enlarged by 0.08 angstrom during absorption of deuterium, and it completely reverted to its original state with the release of deuterium while maintaining the crystal lattice symmetry. These changes provide evidence that deuterium locates not on the surface of the Pd particle, but rather within the Pd crystal lattice. The hydrogen absorption mechanism will also be discussed. (c) 2006 Elsevier B.V. All rights reserved.