A nanostructured sensing element based on anodic aluminum oxide (AAO) nanowells was fabricate and assessed for hydrogen gas sensing. AAO nanowells with an average diameter of 73 nm and depth proportional to the anodization time were immersed in a surfactant solution and coated with an 8 nm film of palladium nanoparticles. The electrical resistance change of the nanostructure with hydrogen gas exposure was used as the sensing parameter. The AAO nanowells-Pd nanostructures were characterized using atomic force microscopy (AFM), field-emission scanning electron microscopy (FESEM), and contact angle test. Hydrogen concentrations as low as 0.05 vol% (500 ppm) can be detected at room temperature. Response times as fast as 1.15 seconds were obtained. Compared to current devices and nanostructures in development, the AAO nanowell-Pd nanostructure is found to be considerably fast without compromising sensitivity and selectivity.