Experimental and computational studies were performed to investigate the effect of varying sulfur coverage over MoS2 in hydrodesulfurization (HDS) of dibenzothiophene (DBT). Hematite and iron particles were employed as H2S scavengers. MoS2 showed high hydrogenation (HYD) preference in HDS of DBT which was explained by the DFT calculations showing that HYD pathway is more favorable in brim adsorption. The addition of hematite drastically shifted this preference to direct desulfurization (DDS) pathway. DFT calculations showed that MoS2 forms edges with 25% sulfur coverage in presence of hematite. The hydrogen dissociation was found to be energetically unfavorable (deactivated) over the Mo-edge with such sulfur coverage and becomes exothermic (reactivated) only after sigma adsorption of DBT on a vacancy site. In agreement with experimental results, calculations also showed that in the presence of vacancies, the sigma adsorption of DBT and therefore DDS pathway is more favorable. MoS2 with iron particles present, favored the HYD reaction route, however, compared to MoS2 the biphenyl (BP) selectivity increased while the selectivity for isomerized products was reduced. DFT calculations showed that in the presence of iron, Mo-edge has 37% coverage with a vacancy site formed over this edge which explains the higher DDS activity for this catalyst compared to MoS2. A difference was observed in the ability of H-2 and H2S in creation of acid sites upon their dissociation at the edges. This was attributed to the difference in S-H bond energies in each molecule and the change in oxidation sate of neighboring Mo atoms.