Pd grating patterns have been fabricated using the process of micromolding in capillary employing a Pd alkanethiolate precursor, which could be converted to metal in situ by thermolysis. Thus generated Pd grating were uniform in width (∼950 nm) and spacing (∼450 nm) over millimeter square areas on glass substrates. Importantly, the pattern when used as an optical grating produced a diffraction pattern with a high resolution (> 2000); the intensities of widely separated (diffraction angle, ∼26.8°) diffracted spots could be measured using a simple photodiode. By varying the concentration of Pd precursor (2mMto 25 mM), thickness of the resulting gratings could be adjusted in the range of ∼15–115 nm. By adjusting the grating parameters optimally, a maximum diffraction efficiency of 36% has been achieved. Thus fabricated Pd grating was used as seed catalyst to deposit Cu by electroless plating. The Cu deposition process has also been monitored by employing AFM, SEM and EDS analysis. The diffraction efficiency values corroborate well with the changes in the grating thickness due to Cu deposition. The grating structures presented can be reproducibly fabricated for rapidly emerging optical diffraction based sensing applications. This has been demonstrated in the case of aqueous Cu2+ by depositing the latter electrolessly on Pd.