Surface composition and structure of deposited Ni ultrathin films grown on a Pd(111) surface and their thermal stability have been studied using Auger electron spectroscopy (AES), X-ray photoelectron spectroscopy (XPS), low energy ion scattering (LEIS) and scanning tunneling microscopy (STM). In experiments where up to 2 mono layers (ML) of Ni was deposited onto Pd(111) at 300 K, the initial film growth followed a non-ideal layer-by-layer growth mode, in which the majority of the surface was covered by a single atomic layer of Ni, but the second Ni layer started to appear before the first layer was completed. Annealing the Ni/Pd(111) surface to 600 K caused Ni interdiffusion into subsurface layers and the outermost surface was mainly Pd. This structure, designated as Pd-Ni-Pd(111), was not stable in the presence of surface oxygen. Ni segregated to the topmost surface layer to forth a (2 x 2) superstructure after exposing the Pd-Ni-Pd(111) surface at 590 K to 350 L O-2. The oxygen-induced segregation of Ni is consistent with predictions from density functional theory (DFT) calculations. (C) 2015 Elsevier B.V. All rights reserved.