The notion of "active sites" is fundamental to heterogeneous catalysis. However, the exact nature of the active sites, and hence the mechanism by which they act, are still largely a matter of speculation. In this study, we have presented a systematic quantum chemical molecular dynamics (QCMD) calculations for the interaction of hydrogen on different step and terrace sites of the Pd (3 3 2) surface. Finally the dissociative adsorption of hydrogen on step and terrace as well as the influence of surface hydrogen vacancy for the dissociative adsorption of hydrogen has been investigated through QCMD. This is a state-of-theart method for calculating the interaction of atoms and molecules with metal surfaces. It is found that fully hydrogen covered (saturated) step sites can dissociate hydrogen moderately and that a monovacancy surface is suitable for significant dissociative adsorption of hydrogen. However in terrace site of the surface we have found that dissociation of hydrogen takes place only on Pd sites where the metal atom is not bound to any pre-adsorbed hydrogen atoms. Furthermore, from the molecular dynamics and electronic structure calculations, we identify a number of consequences for the interpretation and modeling of diffusion experiments demonstrating the coverage and directional dependence of atomic hydrogen diffusion on stepped palladium surface. (C) 2011 Elsevier B.V. All rights reserved.