Palladium hydrides have important applications. However, the complex Pd–H alloy system presents a formidable challenge to developing accurate computational models. In particular, the separation of a Pd–H system to dilute (α) and concentrated (β) phases is a central phenomenon, but the capability of interatomic potentials to display this phase miscibility gap has been lacking. We have extended an existing palladium embedded-atom method potential to construct a new Pd–H embedded-atom method potential by normalizing the elemental embedding energy and electron density functions. The developed Pd–H potential reasonably well predicts the lattice constants, cohesive energies, and elastic constants for palladium, hydrogen, and PdH
xphases with a variety of compositions. It ensures the correct hydrogen interstitial sites within the hydrides and predicts the phase miscibility gap. Preliminary molecular dynamics simulations using this potential show the correct phase stability, hydrogen diffusion mechanism, and mechanical response of the Pd–H system.