(Co/Pd)N multilayers with Co and Pd layer thicknesses of only a few monolayers exhibit high vertical magnetic anisotropy and have been extensively explored as recording medium candidates for high density magnetic recording applications. In the work reported here, the magnetic properties of (Co/Pd)N multilayers deposited by magnetron sputtering and designed for bit-patterned medium applications are correlated with X-Ray Photoelectron Spectroscopy (XPS) data – an approach commonly used to probe the binding energies and valence band positions. Although the XPS probing depth is limited to ˜2–3 nm, it is sufficient for the evaluation of the 1–2 topmost bilayers in a multilayer stack, and allows us to infer the relevant details of the bandstructure of the entire film. Confirming theoretical predictions, we demonstrate that the degree of d-shell hybridization at Co/Pd interfaces directly correlates with the magnitude of the magnetic anisotropy. Significantly, the highest hybridization of Pd atoms is observed for about one monolayer thick Co layers in the bilayer stack. Variation of the deposition conditions (e.g., deposition pressure) shows a measurable influence on d-electron hybridization, multilayer microstructure, and magnetic anisotropy.