The electrical and structural properties of the Pd/InP (100) Schottky barrier diodes have been investigated as a function of annealing temperature by current–voltage (I–V), capacitance–voltage (C–V) and X-ray diffraction (XRD) measurements. The Schottky barrier height of the as-deposited, 100 and 200°C annealed contacts determined from the I–V and C–V measurements are 0.56 and 0.81 eV, 0.57 and 0.81 eV, and 0.58 and 0.82 eV, respectively. However, both the measurements showed that the Schottky barrier height of the Pd/n-InP Schottky contact is increased to 0.59 eV (I–V) and 0.83 eV (C–V) when the contact is annealed at 300°C for 1 min in nitrogen atmosphere. Further Schottky barrier height decreases to 0.57 eV (I–V), 0.71 eV (C–V) and 0.53 eV (I–V), 0.67 eV (C–V) after annealing at 400 and 500°C samples. The result shows that the optimum annealing temperature for the Pd/InP Schottky diode is 300°C. Norde method is also used to determine the barrier height of Pd Schottky contacts and the values are 0.56 eV for the as-deposited contact, 0.57, 0.57, 0.58, 0.57 and 0.54 eV for contacts annealed at 100, 200, 300, 400 and 500°C which are consistent with the values obtained by the I–V measurements. From the atomic force microscopy results, it is evident that the overall surface morphology of the Pd/InP Schottky diode is fairly smooth. Based on the XRD results, the formation of phosphorus-oxygen compounds at the interface may be responsible for the variation in barrier heights observed in Pd/InP Schottky contacts with annealing temperature.