The microstructure of nanocrystalline Pd was investigated by small angle scattering of neutrons and X-rays. The samples were prepared by compacting small crystallites produced by evaporation and condensation in an inert gas atmosphere. The strong scattering signal is interpreted to arise from crystallites embedded in a matrix of incoherent interfaces. Size distributions were deduced from the scattering curves. They consist of two parts: the crystallite size distribution dictated by the production process, and a structureless contribution due to the correlation in the spatial arrangement of the crystallites. The crystallite size distribution may be described by a log-normal distribution centred at R=2nm. The characteristic form of the correlation contribution arises from the dense packing of non-spherical crystallites. From the scattering cross-section in absolute units the volume fraction vc of crystallites was obtained as vc≈0.3, and the mean atomic density ρi in the interfaces as ρi≈0.52. The change of structural parameters during thermal annealing of the samples was studied. Up to high temperatures an appreciable volume fraction of crystallites with nearly unchanged size remains along with large particles.