Methods for forming hydrogen sensing materials include forming a palladium alloy thin film having less than about 83 atomic percent of palladium, and annealing the palladium alloy thin film to relieve residual stress and increase atomic intermixing of the nanorystaline lattice, while maintaining a grain size close to the grain size of the nonannealed palladium alloy thin film. For example, the sensing material may include a palladium-gold alloy thin film having about 60 atomic percent of palladium and about 40 atomic percent of gold. The palladium-gold alloy thin film is then annealed at a temperature of about 200 degrees Celsius for 1 hour. Methods for detecting hydrogen containing gas in which the hydrogen sensing material is maintained in a single phase when exposed to the hydrogen containing gas, and optical hydrogen sensors are also disclosed.