The superconductor PdTe$_2$ was recently classified as a Type II Dirac semimetal, and advocated to be an improved platform for topological superconductivity. Here we report magnetic and transport measurements conducted to determine the nature of the superconducting phase. Surprisingly, we find that PdTe$_2$ is a Type I superconductor with $T_c = 1.64$ K and a critical field $mu_0 H_c (0) = 13.6$ mT. Our crystals also exhibit the intermediate state as demonstrated by the differential paramagnetic effect. For $H > H_c$ we observe superconductivity of the surface sheath. This calls for a close examination of superconductivity in PdTe$_2$ in view of the presence of topological surface states.
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