Electronic structure modeling is carried out for bulk Pd-H system with implications for certain surface effects and hydrogen transport. The calculation is performed under the framework of density functional theory. The results provide new insight into the charge state of H inside Pd. The H is slightly negatively charged over the composition range studied, and the negative charge around the proton increases with an increasing loading of hydrogen. By studying the behavior of H at the "bridging" site, which is important to surface and transport phenomena, this paper helps to explain why the effective charge observed in H drift experiments is different from the static charge state. (C) 2003 Elsevier Science B.V. All rights reserved.