Nanolayered materials consisting of alternate layers of two different metals offer enhanced mechanical properties such as hardness but the strengthening mechanism is not well understood when the bilayer thickness approaches a few nanometers. Here, we report on the uniaxial compression of aluminum/palladium pillars (900 nm diameter) with bilayer thickness = 2, 20 and 80 nm. We observe that the deformation behavior of these pillars depends on the value of bilayer thickness, changing from dislocation driven plasticity at large bilayer thickness to shear due to grain rotation via grain boundary sliding at small bilayer thickness. The transition occurs at about a bilayer thickness of 20 nm where a mixture of the two mechanisms is apparent. (C) 2010 Elsevier B.V. All rights reserved.