Experimental observations confirmed by density functional theory ͑DFT͒ calculations show that strong epitaxial bonds between Pd atoms and the substrate can induce two competing properties: nobleness and ferromagnetic order in the same material, i.e., Pd bonded on Nb͑100͒. Angle-resolved ultraviolet photoelectron spectroscopy measurements, confirmed by first principles, self-consistent DFT calculations show that the strong, direct bonds between a Pd monolayer and Nb͑001͒ push the d-band center of the monolayer toward lower binding energies, which results in the Pd reactivity comparable to that of the noble metal Ag. The strong epitaxial constraint of the Nb͑001͒ substrate induces a ͑1120͒-oriented hexagonal close-packed structure in thicker Pd films. First principles, self-consistent DFT calculations with spin-orbit coupling included performed at 0 K show that Pd in this structure is ferromagnetically ordered at the optimum lattice constant. Its bands at the Fermi level are flatter in comparison to those of Pd in its natural, nonmagnetic, face-centered-cubic structure, leading to the density of states ͑DOS͒ at the Fermi level which fulfills the Stoner criterion for ferromagnetism. We identify these bands in the bulk band structure and probe them with angle-resolved ultraviolet photoelectron spectroscopy in ͑1120͒-oriented hexagonal close-packed Pd films.