Dynamic transformation in the surface structure and the morphology of Pd-deposited Si(lll) 7 x 7 surfaces with thermal treatment was observed using ultrahigh vacuum scanning tunneling microscopy (UHV-STM). After Pd was deposited on the surface at a coverage of <1 monolayer (ML) or >2 ML, the surface reactions of Pd with Si on a Si(lll) 7 x 7 surface were studied in detail depending on the annealing temperature by observing the real-space STM images. At a low coverage of <1 hit, two-dimensional islands composed of Pd2Si single crystals were clearly observed to be formed epitaxially after annealing at 300 degrees C via the surface thermal reaction. The STM observation permitted the identification of Pd2Si crystals from the six-fold symmetry lattice of protrusions with root 3 x root 3R30 degrees structure on the Si(lll) surface. At a high coverage of >2 ML, Pd2Si crystals were observed to grow epitaxially to form the films at 200 degrees C. In addition, after sequential annealing, a specific superstructure, which has a 3 root 3 x 3 root 3B30 degrees structure on the Si(lll) surface, appeared over the Pd2Si surface at 300 degrees C. This specific structure was demonstrated to be due to Si segregation; that is, the inner Si diffused out from the silicide layer as a result of the thermal treatment.