The phase reactions in Al/Pd2Si/Si junctions caused by thermal annealing have been investigated. Combining x-ray diffraction, transmission electron microscopy, and Auger sputter profiling techniques, a ternary phase diagram for Al-Pd-Si at about 400°C has been qualitatively established for predicting phase changes during reaction. To correlate the present study to junction structures, thin-film layered samples were utilized for exploring the phase fields connecting Al to Pd2Si. Formation of the Al 3Pd4Si compound has been observed and is found to be an important intermediate phase in controlling the reaction kinetics. The effectiveness of Pd2Si in preventing Al penetration into Si is attributed to the stability between the Al3Pd4Si and Pd2Si phases. The phase reactions during the initial, intermediate, and final stages of the junction degradation are qualitatively discussed.