The electrochemical processes of either deuterium insertion into Pd or deuterium extraction from loaded Pd electrodes were investigated in D2O containing various concentrations of LiOD. Both processes show linear Tafel behaviour at low current densities only. The rapid increase in the cathodic overpotential with current suggests the possible involvement of lithium deposition in the hydrogen evolution reaction (HER). However, the anodic process is characterized by a large increase in the extraction current with LiOD concentrations, which indicates strong polarization of Pd-D(H) bonds at the metal surface. It was also found that the spontaneous reaction of Pd with hydrogen dissolved in aqueous electrolytes depends on the nature of the electrolyte; this effect may indicate that hydrogen molecules undergo heterolytic splitting at the Pd surface and that the hydrogen becomes ionic in character as soon as it is adsorbed. If hydrogen on Pd is (quasi-) ionic, its chemical potential depends on the Gibbs energy of surface electron density, thus explaining the correlation between cathodic overpotential and absorption.