In this work, detailed theoretical elucidation on the structural stability and optoelectronic characteristics of the 1T-PdS2 monolayer is provided using density functional theory (DFT). The dynamical and mechanical stabilities of the structure are assessed through the analysis of phonon dispersion spectra and the Born-Huang stability criterion. The value of Young’s modulus comes out to be 68.75 Nm−1, which demonstrates high flexibility of the structure. Further, thermal stability of the structure is investigated using Ab-initio molecular dynamics simulations. The first-principle calculations by GGA + SOC (GGA + U) methods reveal that the monolayer is an indirect bandgap semiconductor having bandgap 1.14 eV (1.173 eV). The dielectric function displays its highest peak in the energy range 1.5–2 eV, whereas the maximum absorption coefficient lies in the ultraviolet region. Furthermore, the impact of vacancy defects are also investigated on the optoelectronic characteristics of the monolayer. The bandgap changes from indirect nature to direct one and reduces from 1.17 eV to 0.25 eV and 0.43 eV under single palladium and sulphur vacancies, respectively. The optical parameters also show enhancement with the introduction of these vacancies. The computational analysis reveals that 1T-PdS2 monolayer possesses advantageous attributes, making it a viable material for different optoelectronic applications.