The diffusion mechanism of hydrogen in an industrial cold worked Pd-23% Ag alloy is investigated according to its grain size. The microstructural parameters are determined by X-ray diffraction analysis and the diffusion parameters are determined using the galvanostatic electrochemical permeation technique. Two diffusion mechanisms are displayed. For apparent grain size below 40 nm the hydrogen atoms diffuse in the grain boundaries. For grain size above 100 nm, an intergranular diffusion mechanism occurs. For intermediate grain size both mechanisms coexist. Furthermore, the diffusion in the grain boundaries is not faster than the diffusion in the bulk, as generally observed for pure samples. This difference is due to interactions between diffusing hydrogen and impurities in the grain boundaries.