The growth and structure of Pd films on Zn(O0001) were investigated using high resolution electron energy loss spectroscopy, x-ray photoelectron spectroscopy, and low energy electron diffraction. Vapor deposited Pd films at 300 K were found to follow a two-dimensional (2D) island growth mode, in which 2D metal islands are formed up to a critical coverage at which point growth occurs primarily in a layer-by-layer fashion on top of the islands. Heating to only 350 K was found to be sufficient to induce partial agglomeration of Pd films into three-dimensional particles. In addition to causing further agglomeration into particles, heating to 700 K resulted in partial reduction of the ZnO surface and the formation of a PdZn alloy.