We have measured the transformation of pseudomorphic Ni films on Pd(100) into their bulk fcc phase as a function of the film thickness. We made use of x-ray diffraction and x-ray induced photoemission to study the evolution of the Ni film and its interface with the substrate. The growth of a pseudomorphic film with tetragonally strained face centered symmetry (fct) has been observed by out-of-plane x-ray diffraction up to a maximum thickness of 10 Ni layers (two of them intermixed with the substrate), where a new fcc bulk-like phase is formed. After the formation of the bulklike Ni domains, we observed the pseudomorphic fct domains to disappear preserving the number of layers and their spacing. The phase transition thus proceeds via lateral growth of the bulk-like phase within the pseudomorphic one, i.e. the bulk-like fcc domains penetrate down to the substrate when formed. This large depth of the walls separating the domains of different phases is also indicated by the strong increase of the intermixing at the substrate-film interface, which starts at the onset of the transition and continues at even larger thickness. The bulk-like fcc phase is also slightly strained; its relaxation towards the orthomorphic lattice structure proceeds slowly with the film thickness, being not yet completed at the maximum thickness presently studied of 30Å (∼ 17 layers).