The effects of tin diffusion, silver and palladium dispersion, and intermetallic compound growth on the shear fatigue of solder joints between thick film mixed bonded conductor Pd-Ag and solder 62Sn-36Pb-2Ag are investigated. Microstructural analysis reveals that the intermetallic compounds (IMC's) Pd <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">3</inf> Sn <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">3</inf> , Pd <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">3</inf> Sn, Pd <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">2</inf> Sn, Pd <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">3</inf> Sn <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">2</inf> , PdSn, PdSn <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">2</inf> , PdSn <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">4</inf> , Ag <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">5</inf> Sn, Ag <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">3</inf> Sn, PbPd <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">3</inf> , and Pb <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">3</inf> Pd <inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">5</inf> are formed after aging. X-ray dot maps demonstrate that the longer the aging time, the more serious the silver and palladium dispersion into the solder and the tin diffusion into the conductor. It is observed that the tin diffuses to the interface of the substrate/conductor after 120 h aging. Shear strength tests with different strain rate show that the adhesion strength decreases with prolongation of aging time. Shear cycling tests indicate that the fatigue lifetime of the solder joints depends on the diffusion depth of the silver and palladium, especially the tin diffusion into the thick film conductor. The above results mean that the more serious is the tin and silver interdiffusion, and the more IMC's is formed in the solder joint (which effects are the results of prolonged storage at high temperature or of long term operation in real SMT assemblies), the more sensitive is the solder joint to stress. Eventually fatigue failure of the joint may result. It is argued that volume change and increased brittleness caused by the intermetallic formation, and volume swelling of the conductor layer due to tin diffusion, are major factors in the decrease of fatigue lifetime and degradation of the shear strength of the solder joints.