Growth and magnetism of ultrathin Fe films on Pd(100) have been studied in situ by reflection high-energy electron diffraction, scanning tunneling microscope, and magneto-optical Ken effect technique. It is found that the growth at the initial stage is in the layer-by-layer mode and the magnetic hysteresis loops are detectable only when the Fe films are thicker than 1.3 monolayer (at 300 K) and 0.5 monolayer (at 55 K).