Carbon nanotubes are considered important materials for hydrogen storage. Although the C-H interaction is very weak at room temperature, the incorporation of highly dispersed Pd nanoparticles increases the H-2 adsorption on carbon surfaces. In this work we performed density functional theory studies of H-2 adsorption on single walled carbon nanotubes (SWCNTs) with C-vacancies and a Pd decoration. We used the VASP and SIESTA codes. Our calculations show that Pd adsorption is favored on the C-vacancies of the (5,5) SWCNT, while H-2 adsorption also occurs preferentially on C-defective sites. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.