Electronic structure of epitaxial Co films on Pd(111) has been investigated as a function of the Co overlayer thickness, by using angle-resolved photoemission spectroscopy (ARPES). It is found that experimental band structures for Pd(111) and work functions for Co/Pd(111) agree reasonably well with the results of band structure calculations; Compared to Pd(111), valence band ARPES spectra of Co/Pd(111) support the existence of the induced magnetic polarization of Pd atoms near the interface, suggesting large hybridization between Co 3d and Pd 4d states near the interface.