While induced spin polarization of a palladium (Pd) overlayer on antiferromagnetic and magneto-electric Cr2O3(0001) is possible because of the boundary polarization at the Cr2O3(0001), in the single domain state, the Pd thin film appears to be ferromagnetic on its own, likely as a result of strain. In the conduction band, we find the experimental evidence of ferromagnetic spin polarized in Pd thin films on a Cr2O3(0001) single crystal, especially in the thin limit, Pd thickness of around 1–4 nm. Indeed there is significant spin polarization in 10 Å thick Pd films on Cr2O3(0001) at 310 K, i.e. above the Néel temperature of bulk Cr2O3. While Cr2O3(0001) has surface moments that tend to align along the surface normal, for Pd on Cr2O3, the spin polarization contains an in-plane component. Strain in the Pd adlayer on Cr2O3(0001) appears correlated to the spin polarization measured in spin polarized inverse photoemission spectroscopy. Further evidence for magnetization of Pd on Cr2O3 is provided by measurement of the exchange bias fields in Cr2O3/Pd(buffer)/[Co/Pd] n exchange bias systems. The magnitude of the exchange bias field is, over a wide temperature range, virtually unaffected by the Pd thickness variation between 1 and 2 nm.