Adsorption of CO on nanosize Pd particles was studied theoretically by density functional method and spectroscopically by means of infrared reflection absorption spectroscopy (IRAS) and sum frequency generation (SFG). A density functional approach was applied to three-dimensional crystallites of about 140 atoms. The model clusters were chosen as octahedral fragments of the face centered cubic (fcc) bulk, exhibiting (111) and (001) facets. Bare and adsorbate-decorated cluster models were calculated with Oh symmetry constraints. Various types of adsorption sites were inspected: 3-fold hollow, bridge, and on-top positions at (111) facets; 4-fold hollow and on-top sites at (001) facets; bridge positions at cluster edges; on-top positions at cluster corners; and on single Pd atoms deposited at regular (111) facets. Adsorption properties of the relatively small regular cluster facets (111) and (00 1) are calculated similar to those of corresponding ideal (infinite) Pd surfaces. However, the strongest CO bonding was calculated for the bridge positions at cluster edges. The energy of adsorption on-top of low-coordinated Pd centers (kinks) is also larger than that for on-top sites of (111) and (001) facets. To correlate the theoretical results with spectroscopic data, vibrational spectra of CO adsorbed on supported Pd nanocrystallites of different size and structure (well-faceted and defect-rich) were measured using IRAS and SFG. For CO adsorption under ultrahigh vacuum conditions, a characteristic absorption in the frequency region 1950-1970 cm(-1) was observed, which in agreement with the theoretical data was assigned to vibrations of bridge-bonded CO at particle edges and defects. SFG studies carried out at CO pressures up to 200 mbar showed that the edge-related species was still present under catalytic reaction conditions. By decomposition of methanol leading to the formation of carbon species, these sites can be selectively modified. As a result, CO occupies on-top positions at particle edges and defects. On the basis of the computational data, the experimentally observed differences in CO adsorption on alumina-supported Pd nanoparticles of different size and surface quality are interpreted. Differences between adsorption properties of Pd nanoparticles with a large fraction of (111) facets and adsorption properties of an ideal Pd(111) surface are also discussed.