Measurements of the magnetic anisotropy of a series of Pd/Co multilayers grown by magnetically enhanced dc triode sputter deposition revealed an interface contribution of 0.53 erg/cm2and a net volume anisotropy of −13.2×108erg/cm3. A characteristic reduction of perpendicular anisotropy for ultrathin Co layers (<4 A˚) is explained by using a pair interaction model to evaluate a thickness dependence of the interface anisotropy. For Pd‐Co interfaces with perfectly sharp composition modulation an interface anisotropy of 0.79 erg/cm2is predicted. By modeling the magnetization behavior a domain‐wall energy density of 2±0.5 erg/cm2is obtained for Pd/Co (2 A˚) multilayers with Pd thicknesses in the range of 4–20 A˚. For perpendicular Pd75Co25alloy thin films the same model gives domain‐wall energy densities in the range of 1–2 erg/cm2. For ultrathin Co layers the interlayer Co–Co coupling range is ∼20 A˚. Temperature dependence of saturation magnetization of a Pd(11 A˚)/Co(7.8 A˚) multilayer demonstrates complete mixing of Pd and Co by 380 °C.