This paper describes part of a project to examine geochemical methods in exploration for Pd deposits in northwestern Ontario. Palladium is one of the platinum group elements (PGE) that is mobile in dilute surface waters as hydroxy complexes, a feature that can facilitate its use in exploration. Earlier studies around the Lac des Iles Pd mine have shown that Pd is widely dispersed in solution even from sulphide-poor mineralization (Hattori & Cameron 2004). The region that includes Lac des Iles has been covered by a lake sediment survey by the Ontario Geological Survey (Dyer & Russell 2002). These lake sediment data provide a further means of better understanding the geochemistry of Pd in the surface environment and its application to exploration for PGE deposits. Factor analysis of the lake sediment data reveals three associations: Factor 1, an association of Cr, Co, Ni, Pt and Pd; Factor 2, an association of Pd, S and As; and Factor 3, an association of Cu, Ag and Au. High scores for Factor 1 extend for 10 km down-ice from the mineralized mafic rocks of Archean age at Lac des Iles and reflect the dispersion of clastic material by ice sheets, supplemented by hydromorphic dispersion. High scores for Factor 2 are much more widespread and are spatially associated with Quaternary glaciofluvial deposits, notably eskers. A plot of Pd alone in lake sediments throughout the area largely reflects this association with eskers. The elemental assemblage of Factor 2 originates from the leaching of fragments of Nipigon diabase (Pd) and Sibley sedimentary rocks (S, As), both of Proterozoic age, contained within the eskers. The high permeability of the eskers permits soluble elements to be leached. All three elements, Pd, S and As, form neutral and anionic complexes and are not adsorbed by negatively-charged iron oxyhydroxide colloids and coatings, which restrict the dispersion of elements that dissolve as cations, such as Cu, Ni and Co. Factor 3, Cu, Ag and Au, occurs in areas of Proterozoic bedrock.