The synthesis of fully dense Pd-Vycor glass composite membranes by electroless plating with or without osmosis is reported. Use of osmotic flux allows one to rapidly form thin (a few microns), fully dense palladium films, which have submicron size microstructure. These features significantly enhance hydrogen permeability as compared to the conventional method. By accounting for resistance of the porous support, it is confirmed that for membranes prepared by the same technique, with gradually changing microstructural characteristics, those with smaller palladium crystallites exhibit larger hydrogen flux. Pd-stainless steel composite membranes were also prepared using electroless plating, either with or without osmosis. Membranes synthesized using osmosis exhibit superior thermal stability.