Thermal stability of films of Pd2Si and PdSi formed on ⟨111⟩ Si wafers has been studied by x‐ray diffraction. We observed that Pd2Si transformed to PdSi at temperatures around 810±10 °C and PdSi transformed back to Pd2Si when annealed below that temperature. We conclude that Pd2Si rather than PdSi is the thermodynamically stable phase on Si at low temperatures, contrary to the existing Pd‐Si phase diagram. The conclusion has been confirmed by annealing bulk Pd‐Si diffusion couples at 750 °C to form Pd2Si, then at 850 °C to transform part of the Pd2Si to PdSi, and then returning to 750 °C to convert the PdSi back to Pd2Si and Si. The bulk transformations were measured by x‐ray diffraction and electron microprobe.