We present an optical method of study of nanoparticle properties using photonic crystal surface waves. Palladium nanoparticles were deposited on a surface of a one-dimensional photonic crystal, which supports the propagation of p-polarized optical surface waves. The changes in the nanoparticle properties, such as its dimension and refractive index, were monitored through angle interrogation of the photonic crystal surface waves. The interaction of palladium nanoparticles with hydrogen was detected with this method. The size-different hydrogen uptake behavior by 2 and 6 nm diameter Pd nanoparticles results in qualitatively different response of the optical signal, viz., in the different signs of such a response. This not only confirms the absence of the alpha- to beta-phase transformation for the smallest palladium nanoparticles, but is a plausible indication that hydrogen donates its electrons to a collective electron band of the metal. (C) 2012 American Institute of Physics. [http://dx.doi.org/10.1063/1.3690085]