A new hydrogen sensor utilizing plasma‐enhanced chemical vapor deposited diamond in conjunction with palladium (Pd) metal has been developed. The device is fabricated in a layered Pd/undoped diamond/p‐doped diamond Schottky diode configuration. Hydrogen sensing characteristics of the device have been examined in terms of sensitivity, linearity, response rate, and response time as a function of temperature and hydrogen partial pressure. Hydrogen adsorption activation energy is investigated in the temperature range from 27 to 85°C. Analysis of the steady‐state reaction kinetics using the I‐V method confirm that the hydrogen adsorption process is responsible for the barrier height change in the diamond Schottky diode. The ability to fabricate diamond‐based hydrogen sensor on a variety of substrates makes the device very versatile for gas sensing.