The dehydrogenation of ammonia borane (BH3NH3) catalyzed by Pd supported on an MgO(100) surface was investigated using the DFT/UB3LYP method and an embedded cluster model. We found that BH3NH3 molecules can be initially adsorbed on 2-Pd atom clusters on the MgO surface (Pd-2/MgO) in two different configurations, and on 4-Pd atom clusters (Pd-4/MgO) in one configuration. One of the two BH3NH3-Pd-2/MgO configurations can dehydrogenate in a concerted pathway with a forward free energy barrier of 16.5 kcal/mol, and the other in a stepwise mechanism with forward barriers of 11.1 and 9.4 kcal/mol, respectively. However, only a stepwise dehydrogenation pathway was found for the single BH3NH3-Pd-4/MgO configuration, with a rate-controlling barrier of 12.6 kcal/mol. These results suggest that the BH3NH3 dehydrogenation mechanism and reaction barrier height can change with the size of the Pd clusters on the MgO(100) surface. Copyright (C) 2013, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.