First principles calculation reveals that the Pd3Ag phase with hydrogen at the octahedral site is energetically more favorable with much lower formation energy than Pd, suggesting that the addition of Ag would increase hydrogen solubility in Pd. Calculation also shows that the adsorption energy of hydrogen on the center site of Pd3Ag (100) surface is higher than the corresponding value of Pd (100) surface, which indicates the amount of absorbed hydrogen on Pd3Ag surface would be less than that on Pd surface. In addition, it is found that hydrogen diffusion in Pd3Ag and Pd surfaces, instead of their bulks, should play a dominant role in determining the magnitude of hydrogen diffusivity, and that higher diffusion barriers and less amount of hydrogen adsorption on Pd3Ag surface fundamentally induce much lower hydrogen diffusivity of Pd3Ag than that of Pd. The calculated results not only agree well with experimental observations in the literature, but also provide theoretical mechanism for a deep understanding of hydrogen behaviors in Pd3Ag and Pd. (C) 2015 Elsevier B.V. All rights reserved.