The palladium-hydrogen system plays a crucial role in catalysis, hydrogen production and storage, hydrogen embrittlement, and sensing technologies. Understanding the transition of palladium nanocrystals (NCs) from the hydrogen-poor (α) phase to the hydrogen-rich (β) phase is crucial for elucidating hydrogen absorption/desorption mechanisms as well as related phenomena such as hydrogen trapping. In this study, we carefully minimized undesired X-ray beam effects and used in situ Bragg coherent diffraction imaging under electrochemical control to map the strain and lattice parameter distribution within individual palladium NCs across electrochemical potentials relevant to hydrogen absorption and desorption. Lattice parameter changes in both α and β phases are tracked, and reversible strain inversion during the α-to-β phase transition is observed. Through strain and reciprocal space analysis and molecular simulations, a model for the α-to-β phase transition is proposed, which includes a hydrogen-saturated subsurface shell, hydrogen depletion from the α phase during β phase nucleation, and propagation of the β phase in a spherical-cap fashion.