Clear excess neutron counts and corresponding fast neutron spectra were measured in biased‐pulse electrolysis experiments with D2O–Pd cells. 2.45 MeV components by low energy d–d reactions were observed repeatedly. The spectra had sometimes mysterious higher energy components in the 3–6 MeV region, which could only be explained as the byproduct of 3‐body (d–d–d) fusion. The chaotic evolution of excess neutron counts and spectral shifts suggested that the competing process of 2‐body and 3‐body fusion would take place in the 0–2 mm depth of Pd cathode surface region. The hypothetical model of excitation screening effect could qualitatively explain the observed phenomena.