Two opposite spin reorientation transitions ͑SRTs͒ of Ni/Pd͑111͒ films induced by Fe-capping layers have been investigated in situ by low-energy electron diffraction, magneto-optical Kerr effect, and x-ray magnetic circular dichroism ͑XMCD͒. In pure Ni films grown on Pd͑111͒, no thickness-driven SRT was observed, leaving the magnetization easy axis in plane. Deposition of Fe 1 monolayer ͑ML͒ on Ni͑6 ML͒/Pd͑111͒ causes a transition to perpendicular magnetization, and further Fe 3 ML deposition leads to a return to in-plane magnetization. The XMCD results confirm a contribution of the orbital magnetic moment of a single Fe layer to the first SRT, which gives a significant impact on the Fe-Ni interface that stabilizes perpendicular magnetic anisotropy ͑PMA͒. The second SRT coincides with the structural change in the Fe film from the fcc to bcc phase, where the reduction in the orbital magnetic moment along the perpendicular direction to suppress the PMA stability was observed. It can be proposed that the origin of the second SRT to in-plane magnetization is attributed to cooperative contributions of the structural transformation of the Fe film and the enhanced demagnetizing field.