Nanocrystalline Pd-capped Mg films were prepared by e-beam evaporation and hydrided/deuterated in order to investigate the hydride decomposition mechanism. To that aim, different techniques were used (XRD, FEG, TPD-MS, isotope exchange and "in situ" desorption optical measurements). Obtained results show that hydride films decomposed at T = 165 degrees C by a process controlled by the Mg/MgH2 interface reaction with an activation energy E-a = 136 +/- 5 kJ/mol H-2. Interface is located into each MgH2 nanocrystallite according to RBS (Rutherford Backscattering) and ERDA (Elastic Recoil Detection Analysis) measurements performed during hydride decomposition. Moreover, RBS and ERDA spectra also show the formation of a MgxPdy intermixed region. This intermixed region does not modify the type of control mechanism but increases the activation energy of the desorption process and slows down further hydrogenation events. Copyright (C) 2013, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.