In September 1997 he was signed by Southampton manager Dave Jones for a fee of £1.0 million. In the dressing room he was "abrasive, awkward and argumentative" but on the pitch he was "determined, hard-working and persistent" and his long legs made him "a most difficult player to compete against". Jones said of Palmer "He covers every blade of grass out there, but that's only because his first touch is so crap". In January 1999 he was transferred to Nottingham Forest for a fee of £1.1 million and was replaced in Southampton's midfield by Chris Marsden.