The formation and structure of monolayer PdRu/Ru(0001) surface alloys and their adsorption properties with respect to deuterium adsorption were investigated by atomic resolution scanning tunneling microscopy and by temperature programmed desorption. Surface alloys, prepared by deposition of up to one monolayer of Pd and flash annealing to 1150 K show (i) negligible loss of Pd by desorption or diffusion into the Ru bulk during this procedure and (ii) dominant phase separation into 2D Pd and Ru islands, in contrast to the random distribution in PtRu/Ru(0001) surface alloys [H.E. Hoster, A. Bergbreiter, P.M. Erne, T. Hager, H. Rauscher, R.J. Behm, Phys. Chem. Chem. Phys. 10 (2008) 3812]. 2D short-range order parameters and the abundance of specific adsorption ensembles were evaluated for different Pd contents, effective pair interaction (EPI) energies were derived from Monte Carlo simulations. Deuterium adsorption on Pd monolayer films shows a pronounced weakening of adsorption bond, which is attributed to compressive strain and metal–metal interactions between Pd and underlying Ru atoms (‘vertical ligand effect’). Mixed adsorption ensembles containing both Pd and Ru atoms give rise to D 2 desorption in the intermediate temperature regime. The impact of the specific lateral distribution of the two metal species on the chemical surface properties is illustrated by comparison with deuterium adsorption on dispersed PtRu/Ru(0001) surface alloys [T. Diemant, H. Rauscher, R.J. Behm, J. Phys. Chem. C 112 (2008) 8381].