This paper investigates the changes in the interface organization and properties of 0.10 mm Pd/Al composite wires annealed at different temperatures. The optimum comprehensive performance of the material was obtained after annealing at 300 °C for 120 s. Its tensile strength, conductivity and elongation are 140.61 MPa, 46.82%IACS and 14.89%, respectively. Scanning electron microscopy (SEM) and transmission electron microscopy (TEM) were used to observe the intermetallic compounds on the interface. The annealing temperature and the formation heat of intermetallic compounds determine the categories and evolution of intermetallic compounds. When the thickness of the intermetallic layer is more than 1 μm, it has a serious effect on the electrical conductivity and elongation of the materials.