First-principles calculations are used to investigate the site preference and diffusion of hydrogen in the initial stage of hydrogenation of Mg. The fcc-hollow site and the tetrahedral site are found to be the energetically favorable sites for hydrogen atom on and below Mg(0001) surface, respectively. When a hydrogen atom diffuses into the bulk Mg, it has to firstly overcome an energy barrier of 0.45 eV. There exist two different diffusion pathways with this energy barrier, which start from two possible surface adsorption sites. While a lower barrier of 0.31 eV is necessary for hydrogen further diffusion into the bulk region. The effect of the subsurface vacancy on hydrogenation is also investigated in terms of hydrogen trapping and diffusion barrier. At most six hydrogen atoms can be trapped by a single Mg vacancy in the subsurface. It is required at least 0.40 eV for the trapped hydrogen to escape from the vacancy. This trapping property and relatively large diffusion barrier to escape from the vacancy would prevent further diffusion of hydrogen into Mg during the initial stage of hydrogenation. The vacancy, however, has little influence on the diffusion property of its neighboring hydrogen atom. Copyright (C) 2015, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.