High resolution in situ XRD was used to study the hydriding behavior of palladium electrocatalysts, prepared from two precursors, (NH(4))(2)PdCl(6) (4.3 nm), and palladium acetylacetonate [Pd(acac)(2)] (6.2 nm), and supported on porous carbon XC-72R. X-ray line profile analysis revealed a defective fcc lattice with internal strains and a high stacking fault probability of 12%. Importantly, no change, neither of the size, nor the state of defects was observed during the phase transition (alpha <-> beta). Based on this finding, a two-phase model adopted from bulk palladium hydride was proposed to describe the transition trough the miscibility gap (MG). Apparently, Pd nanoparticles can "breathe" hydrogen, without modifying their intrinsic crystal structure: A 3-parameter algorithm perfectly reproduces the anomalous line profiles observed inside the MG by a simple rescaling of the intensity profiles measured outside the MG. The algorithm delivers accurate values for the phase boundaries alpha-max, beta-min. They depend sensitively on the particles size and surface state, but also surprisingly on the branch of the hysteresis loop. Time dependent studies verify a hindered kinetics of hydride formation in the presence of surface oxide species. (C) 2010 Published by Elsevier Ltd on behalf of Professor T. Nejat Veziroglu.