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Through emission processes, palladium (Pd) particulates from industrial sources are introduced into a range of ecosystems including freshwater environments. Despite this, research on Pd-induced bioaccumulation, uptake, and toxicity is limited for freshwater fishes. Unlike other metals, there are currently no regulations or protective guidelines to limit Pd release into aquatic systems, indicating a global absence of measures addressing its environmental impact. To assess the olfactory toxicity potential of Pd, the present study aimed to explore Pd accumulation in olfactory tissues, olfactory disruption, and oxidative stress in rainbow trout (Oncorhynchus mykiss) following waterborne Pd exposure. Olfactory sensitivity, measured by electro-olfactography, demonstrated that Pd inhibits multiple pathways of the olfactory system following 96 h of Pd exposure. In this study, the concentrations of Pd for inhibition of olfactory function by 20% (2.5 μg/L; IC20) and 50% (19 μg/L; IC50) were established. Rainbow trout were then exposed to IC20 and IC50 Pd concentrations in combination with varying exposure conditions, as changes in water quality alter the toxicity of metals. Independent to Pd, increased water hardness resulted in decreased olfactory perception owing to ion competition at the olfactory epithelium. No other environmental parameter in this study significantly influenced Pd-induced olfactory toxicity. Membrane-associated Pd was measured at the olfactory rosette and gill following exposure; however, this accumulation did not translate to oxidative stress as measured by the production of malondialdehyde. Our data suggest that Pd is toxic to rainbow trout via waterborne contamination near field-measured levels. This study further demonstrated Pd bioavailability and uptake at water-adjacent tissues, adding to our collective understanding of the toxicological profile of Pd. Taken together, our results provide novel insights into the olfactory toxicity in fish following Pd exposure.