Using surface x-ray diffraction we have investigated growth and structure of Fe deposited on Pd(001) at room temperature. Up to about 4.2 ML, the maximum film thickness studied, Fe grows in layer-by-layer mode without sizable intermixing with Pd. Up to 1.5 ML coverage the Fe film adopts a fct-structure followed by a transition to a bct-structure at higher film thickness. The top Pd interlayer spacing, which in the case of uncovered Pd(001) is expanded by up to 6.5±2.0% relative to the bulk due to adsorbed hydrogen relaxes to 0±2% upon adsorption of 0.6 ML Fe, possibly due to displacement into subsurface sites. Mild annealing (400 K) of a 1 ML Fe/Pd(001) sample induces surface alloying leading to a disordered two layer thick fct-Fe₅₀Pd₅₀₋alloy.