Formic acid (HCOOH) as liquid hydrogen storage material is limited due to the lack of high activity and selectivity catalyst. Recently, Pd-based nanoclusters show its remarkable performance in the HCOOH decomposition process. In this study, HCOOH decomposition process on Pd, Cu and three Pd-Cu nanoclusters are investigated by density functional theory (DFT) calculations. After the analysis of reaction mechanism on these nanoclusters, it is found that the dehydration process is preferable on Pd-55, and the dehydrogenation process occurs on Cu-55. Alloying promotes the increase of selectivity of H-2 generation for monometallic Pd system and decreases the activation energy of rate-limiting step for monometallic Cu system. Among these clusters, Pd43Cu12 is of the highest activity for H-2 production from HCOOH decomposition. In addition, the effect of pre-adsorbed H2O molecule during the whole reaction is discussed. Among all elementary reactions, the COOH* dehydrogenation is deeply impacted except Pd54Cu1 in the presence of pre adsorbed H2O molecule, which is explained by the elongation of O-H band and the less charge transfer from H to O atom. Our results would shed new light on the design of Pd-Cu nanoalloys for hydrogen generation from HCOOH decomposition. (C) 2019 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.