Magnesium nanoparticles coated by a native oxide shell and decorated by palladium clusters were synthesized by the inert gas condensation technique. The kinetics and thermodynamics of hydrogen sorption were investigated by Sieverts measurements at high temperature and by optical hydrogenography close to ambient temperature. The structure and morphology of the nanoparticles were studied by electron microscopy and X-ray diffraction both in the as-prepared state and after hydrogen sorption cycles.