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Palladium (Pd) has received attention as an ideal hydrogen sensor material due to its properties such as high sensitivity and selectivity to hydrogen gas, fast response, and operability at room temperature. Interestingly, various Pd nanostructures that have been realized by recent developments in nanotechnologies are known to show better performance than bulk Pd. This review highlights the characteristic properties, issues, and their possible solutions of hydrogen sensors based on the low-dimensional Pd nanostructures with more emphasis on Pd thin films and Pd nanowires. The finite size effects, relative strengths and weaknesses of the respective Pd nanostructures are discussed in terms of performance, manufacturability, and practical applicability.