Fe–Pd films with Pd content varying between 26 and 30 at.% have been deposited by means of magnetron sputtering of elemental Fe and Pd targets. As-deposited films are highly supersaturated solid solutions of Pd in Fe that have a body-centered-cubic crystal structure and a very fine grain size. Substrate curvature measurements indicate that the films undergo an irreversible densification when heated above 100 °C. This densification is attributed to a structural change that is also observed in other supersaturated systems with a substantial atomic size difference between the constituents. It is possible to retain the high-temperature austenite phase at low temperature by annealing the films at 900 °C followed by rapid cooling. Depending on film composition, this metastable austenitic phase transforms to either a body-centered tetragonal (bct) or a face-centered tetragonal (fct) martensite around room temperature. Substrate curvature measurements show that formation of the fct martensite is reversible, while that of bct martensite is not. The fct transformation occurs at lower Pd content and higher temperature than reported for bulk materials. Both the fct and the fcc phase show a strong Invar effect at lower temperature and Pd content than observed in the bulk.