Pd/Vycor(R) composite membranes were prepared using electroless plating from both typical hydrazine-based and formaldehyde modified baths. The electroless palladium film obtained from the modified bath has a higher luster, smaller grain size, and is denser than the typical bath. Using a new preparation technique which combines electroless plating and osmosis, the microstructure of the palladium film can be manipulated to yield both porous and dense films without altering the chemistry of the plating bath.