We prepared PdO nanoflake thin films on the SiO2 substrate by reactive sputter deposition, and studied their sensing response to H2 at temperatures between 25 and 250°C. In addition to the oxygen ionosorption model, which is used to describe the early H2 sensing response over the temperature range studied, the H2 sensing kinetics of the PdO thin films can be separated into three temperature regimes: temperatures below 100°C, around 150°C and above 200°C. At temperatures below 100°C, PdO reduction is the dominant reaction affecting the H2 sensing behavior. At temperatures around 150°C, Pd reoxidation kinetically competes with PdO reduction leading to a complicated sensing characteristic. Active PdO reduction by H2 promotes the continuing growth of Pd nanoislands, facilitating dissociative oxygen adsorption and thus the subsequent Pd reoxidation in the H2-dry air gas mixture. The kinetic competition between the PdO reduction and reoxidation at 150°C leads to the observation of an inverse of the increase in the sensor conductivity. At temperatures above 200°C, the PdO sensor exhibits a sensor signal monotonically increasing with the H2 concentration, and the H2 sensing behavior is consistent with the Mars-van-Krevelen redox mechanism.