The adsorption of nitrous oxide N2O on the Pd(110) surface has been studied and characterized using density-functional theory. We found that N2O binds weakly to the surface in two alternative forms, either tilted with the terminal N atom attached to the surface or lying horizontally on the surface in the [001] direction. The adsorption on the on-top site is more stable than that on the bridge one. The horizontal form of N2O(a) is appropriate as the precursor of the inclined desorption of the product N-2 observed in the thermal decomposition of N2O(a).