For hydrogen sensor and storage applications, films of Au and Pd were (i) co-sputtered at different rates or (ii) deposited in a sequentially alternating fashion to create a layered structure on a cover glass. Peculiarities of hydrogen uptake and release were optically monitored using 1.3 μm wavelength light. Increase of optical transmission was observed for hydrogenated Pd-rich films of 10-30 nm thickness. Up to a three times slower hydrogen release took place as compared with the hydrogen uptake. Compositional ratio of Au:Pd and thermal treatment of films provided control over the optical extinction changes and hydrogen uptake/release time constants. Higher uptake and release rates were observed in the annealed Au:Pd films as compared to those deposited at room temperature and were faster for the Auricher films. Three main parameters relevant for sensors: sensitivity, selectivity, stability (reproducibility) are discussed together with the hydrogenation mechanism in Au:Pd alloys.