Interactions of O2 with the PdO(101) surface were studied using spin-dependent density-functional theory (DFT) with both the PBE and the non-local hybrid HSE exchange–correlation functional. The adsorption energies are strongly overestimated (by 40–60 kJ/mol) with PBE, whereas HSE predicts adsorption energies that are within ~5 kJ/mol of values derived from temperature programmed desorption (TPD) experiments. A detailed partial density of states analysis indicates that the band gap between the PdO d-band center and the LUMO of O2 plays an important role in determining the adsorption strength. This gap is larger for the HSE functional and leads to a decrease in the back donation of the metal d-states to the O2 LUMO orbital resulting in weaker adsorption. Based on the DFT–HSE calculations, three adsorption minima are found to be stable. The most favored configuration, with an adsorption energy of −67 kJ/mol, consists of an O2 molecule lying flat and interacting with two coordinatively unsaturated Pd (Pdcus) surface atoms. The other two configurations have weaker adsorption energies of about −25 kJ/mol and bind to a single Pdcus atom with the O2 molecule oriented away from the surface. The HSE results can be correlated with the observed TPD spectra, which shows only one type of O2 configuration at low coverages with a subsequently lower temperature (more weakly bound) peak evolving at higher coverages associated with the singly coordinated O2 adsorption configurations that start to populate when two adjacent Pdcus sites start to become unavailable.