The molecular and electronic structure of the complexes formed from interaction of Pd and MgO have been determined from ab initio self-consistent field and complete active space self-consistent field wave functions. The electronic structure of PdMgO and PdOMg appears to be rather involved because of the energy proximity between the ground 4d(10) and excited 4d(9) 5s(1) electronic configurations of Pd atom and the near degeneracy between the HOMO and LUMO of MgO. The only stable structures of PdMgO and PdOMg were linear and correspond to the lowest (1) Sigma(+), (3) Sigma(+), (1) Pi, (3) Pi, (1) Delta, and (3) Delta electronic states. The dissociation energies with respect to the isolated fragments have been calculated through multireference configuration interaction expansions. Several methods of analysis of the wave functions indicate that the bonding in the O- and Mg-bonded complexes is quite different while, for a given complex, the nature of the chemical bond in the different electronic states appear to be rather similar. (C) 1997 American institute of Physics.