The effect of hydrogen on the Fe giant moment in dilute PdFe and the resulting single moment Kondo and RKKY interactions in PdHxFe is investigated by Mo¨ssbauer hyperfine techniques in an external magnetic field. The results show that within a large range of composition within the &agr;′ phase (hydrogen lattice liquid), &mgr;(Fe) remains constant at about 3.9&mgr;B, smaller than the 12.6&mgr;Bin dilute PdFe. The Kondo temperatureTKis found to increase with hydrogen, as determined from the usualX=&mgr;H/k(T+&Vthgr;) modification to the Brillouin functionB1(X) where &Vthgr;=4.5TK. The dynamic part of the impurity interactions leads to a spin‐glass–type spin‐spin relaxation, which produces a line broadening in a magnetic field much larger for the outer Mo¨ssbauer lines and with a maximum in field at aboutX=1. At higher concentrations (x=0.76), the saturation HF field decreases, indicating a possible orbital component on &mgr;(Fe); this conforms with certain recent calculations. Abovex=0.8, new Mo¨ssbauer lines are found, indicating the phase transitions and two‐phase regions &agr;′ → &bgr; and &bgr; → &agr;″with increasing hydrogen content.