Jim Palmer has discovered the fountain of youth.

It's located in the bullpen.

Although he was in command of the Kansas City Royals tonight in a 5-1 victory, three months ago Palmer's career was at its lowest point. Coming off the second losing season of his career, his ERA for '82 was 6.84. His relationships with both the Baltimore Orioles' front office and his manager were at all-time lows.

Finally, after Palmer, 36, pulled himself from one game in California with an arm injury, then scratched himself from his next start, everybody concerned was fed up. Palmer was exiled to the bullpen with no promise that he would ever return. His starting job was given to Sammy Stewart. Palmer, shocked and hurt, ask to be traded; to his further surprise, both the Orioles and Manager Earl Weaver responded, in effect, "Just as soon as we can."

Gradually, in his bullpen purgatory, Palmer changed. Maybe his arm got well. Or, maybe, he faced some athletic old-age decisions.

At any rate, he changed his tune. He told the Orioles, "I don't want to be traded." He had a closed-door meeting with Weaver, and, Weaver said tonight, "Basically, he told me that there was no reason he couldn't pitch and win, just as he always had. It was music to my ears, just like when he used to come in, out of the blue, and say, 'Skipper, I feel great. I'm gonna win seven in a row.' "

Since then, Palmer has, in large degree, been the Palmer of old. He's on a seven-game winning streak; he hasn't lost since May 30. Since leaving the pen, his ERA is 2.53. In his last 11 starts, it's 2.37.

Tonight, that return to form reached its peak as Palmer completely overmatched a Kansas City club that leads the majors in hitting with a .288 team average. Palmer beat the Royals before 20,943 in Memorial Stadium while allowing just three hits and one walk in his 257th major league victory.

Except for a meaningless opposite-field homer by George Brett in the seventh, the Royals were completely under Palmer's fast-balling mastery as only one other man passed first base. This night, Palmer struck out seven, including Amos Otis and Hal McRae. The Royals had some feeble hacks against the old man who consistently whistled pitches in at 90 mph, usually on the outside edge. Of Kansas City's 31 batters, no more than six even hit the ball with authority.

Palmer's excellence was just part of the Orioles' message of: Welcome to Memorial Stadium, you Royals.

Last week in Kansas City, the Orioles lost four straight; this night, they returned the hospitality in kind.

The Orioles, helped by a first-inning homer by Al Bumbry, a bases-loaded walk by Rick Dempsey, a bases-loaded, two-run single by Rich Dauer and an RBI single by Dan Ford, won their third game in the last four after a five-game losing streak. Baltimore now trails Milwaukee by 3 1/2 games and Boston by two in the American League East.

More than just league standings, however, the Orioles were concerned with giving the Royals some of the medicine they had swallowed four times in Royals Stadium.

Welcome, you rocket rabbit Royals, to long grass where ground balls slow down, instead of speeding up, and where every hop isn't pool-table perfect.

Welcome to outfield fences that can be reached by the pokes of mortal men. And even those of little Bee's. Welcome to dirt base paths where stolen bases come a step harder than on carpet. Say hello to soggy outfields where nobody's speed is worth too much and where line drives earmarked for doubles and triples shrink to singles and doubles.

The Royals, who face horribly unappetizing pitching matchups the rest of this five-game series, got a mouthful of all these bad tastes tonight. In this first game, the Orioles finished Vida Blue in the fourth inning; behind him, the pitching-thin Royals can offer only Don Hood, Dave Frost, Bud Black and (just off 10 weeks on the disabled list) Dennis Leonard.

Palmer, who had 83 fast balls and 74 strikes among 113 pitches, has added one wrinkle with age: on the advice of Ray Miller, the pitching coach, he stopped talking to the media.

"Jimmy's probably gotten himself in more jams over the years with his honesty than with his pitching," said Miller. "He's said some things he shouldn't have, because they weren't tactful. But they were always entirely honest. That's caused problems with Earl. . . because Earl flew off the handle.

"Also, I don't want Jimmy constantly analyzing himself."

To all this Weaver, ever the needler, said with a snort, "If somethin' goes wrong, Jimmy'll talk . . . We needed a complete game tonight. Even I got one."

Even tonight, Palmer could not remain silent. After his last start, in which he shut out the Royals for seven jam-filled innings before tiring in the eighth, a reporter remarked to Palmer that the performance seemed like "one of your best ever."

This evening, Palmer sent out a message from the sanctuary of the trainer's room: "This one was even better."