Pd/Co and Pd/Fe multilayer films containing ultrathin Co and Fe layers were prepared by vapor deposition on substrates at room temperature. Their modulated structure, even for films containing 2-Å-thin Co and Fe layers, was proved by x-ray diffraction and transmission electron microscopy. Below a Co layer thickness of about 8 Å, the Pd/Co multilayers acquire an easy magnetic axis perpendicular to the film, which is mainly caused by magnetic interface anisotropy. This leads for multilayers containing Co monolayers to almost rectangular hysteresis loops, by which these films may be very suitable as a perpendicular magnetic recording medium. Pd/Fe multilayers also have a perpendicular interface anisotropy, but the shape anisotropy dominates. Per unit Co volume the Pd/Co multilayers have a higher saturation magnetization than pure Co, which is attributed to an induced ferromagnetism on Pd interfacial atoms.