The energy shortage and environmental pollution crises have prompted the investigation of hydrogen based cleaner energy system. Therefore, hydrogen has been considered as a promising energy carrier due to its sustainability and environmentally friendly. This research considered the separation of hydrogen from mixed gas (H2 and N2) by using Pd-based membrane. In order to produce extra high purity of hydrogen, the separation of hydrogen using Pd-based membrane under steady state operation suffers from long time lag and membrane deactivation. These two technical problems leading to the decrease of hydrogen permeability were intensively addressed in this work. The separation of hydrogen was conducted by using a Pd/α-Al2O3 membrane with aim to improve the performance of separation, indicated by time lag and hydrogen recovery. The novel method of the dynamic membrane operation was applied by performing a composition modulation of the feed gas flow rate. The steady state operation was used as a base case for comparison to dynamic operation. All experiments were carried out at 325 °C, atmospheric pressure, and H2/N2 ratio of 1:1, while varying the switching time and concentration amplitude for dynamic operation. The Pd based membrane was prepared, characterized, and it showed no pin hole could be found. The permeability constants for unsteady state condition resulted in higher when compared to steady state condition. The experiment results showed that the recovery of hydrogen under steady state condition was 21%. On the other hands, the recovery of hydrogen under invoked unsteady state operation was significantly improved three times higher than that of the steady state operation. The recovery of hydrogen increased 8–13% when the feed gas amplitude decreased from 1.5 mL/s to 0.5 mL/s. Operations at 300 s switching time and 0.5 mL/s flowrate amplitude reached the hydrogen recovery up to 63%.