The thermal stability of nickel silicide (NiSi) on a silicon-on-insulator (SOI) substrate after postsilicidation annealing (550–700 °C) is discussed in this paper. Nickel silicide technology, used for nanoscale complementary metal oxide semiconductor (CMOS) field-effect transistor (FET) devices, has a fundamental problem of thermal stability. Three different Pd concentrations in Ni–Pd alloy, 1, 5, and 10 at. %, were used to study the thermal stability of nickel silicide formed by a silicidation process. The Ni–Pd (10%) sample showed good thermal stability upon annealing at temperatures up to 700 °C for 30 min. Only a low-resistivity mononickel silicide (NiSi) phase peak was observed by X-ray diffraction (XRD) measurement, which was confirmed by Auger electron spectroscopy (AES) analysis. Uniformly formed nickel silicide with a good interface profile was obtained using the Ni–Pd (10%) sample according to field-emission scanning electron microscopy (FE-SEM) measurement. However, the Ni–Pd (5%) sample produced high-resistivity nickel disilicide (NiSi2) after annealing at 650 °C for 30 min. Four different layer structures, Ni, Ni/TiN, Ni/Co/TiN, and Ni–Pd (10%)/Co/TiN, were also used for further study. Among these structures, the Ni–Pd (10%)/Co/TiN layer structure had good thermal stability upon annealing at temperatures up to 700 °C, while the other structures deteriorated due to agglomeration above 550 °C.