Significant differences are observed in the hydrogen sorption behavior of as-received, HF-treated, and oxidized PdZr alloys. Removal by HF treatment of the surface ZrO2 layer, which blocks sorption of hydrogen, and a part of the bulk Zr generates a porous surface layer of increased surface area. The resulting specimen sorbs hydrogen even at low H-2 partial pressure. A thick oxide layer composed of a mixture of PdO and ZrO2 is formed by aerobic oxidation (553 K, 3 h). A diffusion controlled slow H-2 sorption by Pd in the surface layer followed by a rapid and large H-2 sorption by the bulk alloy is observed. This results in the fracturing of the surface oxide layer and the formation of the hydrides of the constituent elements. The pretreated alloy samples studied exhibit high catalytic activities and selectivities in the hydrogenation of compounds with multiple unsaturation (cycloocta-1,3-diene, phenylacetylene, 1-pentyne).