PURPOSE: To manufacture Ag-Pd alloy powder for thick film paste having submicron particle uniform in size, composition and quality by dissolving Ag-Pd alloy into nitric acid and adding reducing agent to this to precipitate Ag-Pd alloy powder.

CONSTITUTION: The Ag-Pd alloy is dissolved into the nitric acid. The reducing agent is added to this solution to precipitate the Ag-Pd alloy powder. For this reducing agent, K, Ca, etc., whose normal electrode potential is larger than that of Ag, e.g. metallic salt having low valency state of Fe2+, Sn2+, etc., aldehyde group, sugers, etc., is used. The above precipitation is filtered and if necessary, submerged into hydrochloric acid, and after removing residual reducing agent, etc., washing and drying are executed. By this method, the Ag-Pd alloy powder for thick film paste having uniform alloy composition and uniform submicron particle size without any segregation of Ag, can be mass-produced at a low cost.