In this paper we explain the results of our experimental investigation on interface properties and junction behavior of Pd contact on ZnO thin film based Schottky diode. We used a conventional vacuum evaporation deposition unit for sequential deposition of ZnO film and metallic layer. For the first time a high quality Pd/ZnO Schottky diode is fabricated successfully in our laboratory by vacuum evaporation method. The I-V and C-V characteristics of the devices were studied by using microprobe arrangement. The parameter such as ideality factor, leakage current, resistance-area-product, carrier concentration and barrier height were extracted from the measured data. The surface morphological and the structural properties of thin film were studied by atomic force microscope. The optical band gap of thin film was determined using UV-visible spectrophotometer. The device fabricated by a simple technique exhibited excellent stability for use as an electronic or optoelectronic component. © 2010 Wiley-VCH Verlag GmbH & Co. KGaA, Weinheim.