There is a great interest in the development of reliable and low-cost hydrogen sensors for applications in the hydrogen economy, industrial processes, space application, detection of environmental pollution, and biomedical applications. Here, a new type of optical detector that indicates the presence of hydrogen in concentration range 5 ppm to 0.1 vol% H-2 merely by a reversible and tunable color change is reported. The device takes advantage of the reversible change in optical properties of a Pd-capped Y thin film upon exposure to H-2, while the color is tuned using the interference of light reflected between the Y and Pd layers. In this way, an eye-readable optical sensor that circumvents the need for electronics and external digital readouts is created. Using surface modifications, the performance of the H-2 detector in humid and oxygen rich environment is greatly improved. Therefore, the device has the potential to be used for chemical and also biochemical/biomedical H-2 sensing applications such as breathe hydrogen tests.