Nanometre-sized or nanocrystalline materials are polycrystals with a small crystallite size (5-15 nm) and a large fraction of atoms (20-50%) in the disordered interfaces. For the study of the atomic arrangement and the relaxation processes in the interfacial structure, measurements of the shear modulus G and the internal friction Q−1 have been performed on nanocrystalline Pd (n-Pd) at torsional frequencies of about 1 Hz. The reduction in G in comparison with that for coarsegrained Pd is attributed to the increased interatomic distances in the interfaces of n-Pd. For the increase in G at about 400 K, which is ascribed to an irreversible reordering of the interfacial structure, an activation energy of 0·65 eV is found. These re-ordering phenomena are discussed together with recent annealing studies of free volumes by positron annihilation techniques, of the electrical resistivity and of the mass density. The steep increase in the internal friction in n-Pd above 400 K will be tentatively discussed in terms of viscous sliding of interfaces.