This work provides a detailed characterization study on H2S poisoning of Pd and Pd/Au alloy composite membranes to obtain fundamental understandings of sulfur poisoning phenomena and preparation of sulfur tolerant membranes. The enhancement of the sulfur tolerance by alloying Pd with Au has been confirmed by both permeation test and microstructure analysis (SEM and XRD). While pure Pd membranes exhibited the permeance decline in the presence of H2S due to both sulfur adsorption and bulk Pd4S formation, Pd/Au alloy membranes showed the permeance loss merely resulted from the surface sulfur adsorption without bulk sulfide formation up to 55 ppm H2S. The XPS study confirmed that the H2S adsorption on the Pd/Au alloy surfaces was dissociative, and both surface Au and Pd sulfides were formed with the preferential Au-S bonding. The adsorption type of sulfur on the Pd/Au alloy surfaces was monolayer with a limited coverage, which increased with decreasing temperature. The permeance loss of Pd/Au membranes was essentially fully recoverable in H2, and the integrity of the membranes remained unaltered after the poisoning/recovery tests. Increasing Au composition in the Pd/Au membranes increased the sulfur tolerance. A Pd/Au alloy membrane of 16.7 wt% Au exhibited a permeance over 50% of its original value in the presence of 5 ppm H2S at 400°C, while a Pd membrane showed 85% permeance loss. The Pd/Au alloy membranes were fabricated by the Au displacement deposition, which had an empirical reaction order of 3.2 determined by the AAS. The HT-XRD study verified that the formed Pd/Au alloy layers were thermally stable up to 500°C.