The alloying effect of Pd on the martensitic transformation behavior in Ti–Nb alloys has been systematically investigated using X-ray diffraction (XRD) and transmission electron microscopy (TEM). The composition field of the orthorhombic α″ martensite is determined on the Ti–Nb–Pd isothermal section, and appears close to the Ti–Nb edge. The addition of small amounts of Pd affects the lattice parameters of the α″ significantly. It was noticed that increasing Pd content will increase a but decrease b value of the α″ while c remain almost constant. Such variations could make the martensitic transformation easier and a fully martensitic structure containing single α″ has been detected by XRD and TEM in a Ti–18.2Nb–0.5Pd (at.%) alloy. Transformation twinning of the (110) α″ type was observed in the transformed martensite although the density is low.