The invention relates to an aqueous plating bath composition and a method for depositing a palladium layer by electroless plating onto a substrate. The aqueous plating bath composition according to the invention comprises a source for palladium ions, a reducing agent for palladium ions and an unsaturated compound. The aqueous plating bath composition according to the invention has an improved stability against undesired decomposition due to the unsaturated compounds while keeping the deposition rate for palladium at the desired satisfying value. The aqueous plating bath composition has also a prolonged life time. The unsaturated compounds of the invention allow for adjusting the deposition rate to a satisfying range over the bath life time and for electrolessly depositing palladium layers at lower temperatures.