Compared with the other hydrogen sensors, optical fiber hydrogen sensors based on thin films exhibits inherent safety, small volume, immunity to electromagnetic interference, and distributed remote sensing capability, but slower response characteristics. To improve response and recovery rate of the sensors, a novel reflection-type optical fiber hydrogen gas sensor with a 10 nm palladium and yttrium alloy thin film is fabricated. The alloy thin film shows a good hydrogen sensing property for hydrogen-containing atmosphere and a complete restorability for dry air at room temperature. The variation in response value of the sensor linearly increases with increased natural logarithm of hydrogen concentration (ln[H(2)]). The shortest response time and recovery response time to 4% hydrogen are 6 and 8 s, respectively. The hydrogen sensors based on Pd(0.91)Y(0.09) alloy ultrathin film have potential applications in hydrogen detection and measurement.