Density functional theory (DFT) method was carried out to simulate the adsorption of three dissolved gases on Pd-doped MOS2 (Pd-MoS2) monolayer. We initially studied the possible structures of Pd-MoS2 monolayer and found that the Pd dopant preferred to be adsorbed onto the surface by T-Mo site. The adsorption and desorption performance, along with the sensing principle of Pd-MoS2 towards three typical gases, including H-2, CH4 and C2H2, were analyzed. These analysis indicated that Pd-MoS2 could be a satisfied material for C2H2 and H-2 sensing at specific condition; while it is unsuitable for detection of CH4 due to the weak interaction and extremely short recovery time. All these give a first insight into the application of Pd-MoS2 for DGA, evaluating the working operation of the transformer through sensitive detection of H-2 and C2H2. We are hopeful that this work would support informative knowledge for experimentalists to realize the potential of Pd-MoS2 in the field of electrical engineering in the near future.