Theoretical calculations focused on the geometry, stability, electronic and magnetic properties of small palladium clusters Pdn (n=1-5) adsorbed on the NiAl(1 1 0) alloy surface were carried out within the framework of density functional theory (DFT). In agreement with the experimental observations, both Ni-bridge and Al-bridge sites are preferential for the adsorption of single palladium atom, with an adsorption energy difference of 0.04 eV. Among the possible structures considered for Pdn (n=1-5) clusters adsorbed on NiAl(1 1 0) surface, Pd atoms tend to form one-dimensional (1D) chain structure at low coverage (from Pd1 to Pd3) and two-dimensional (2D) structures are more stable than three-dimensional (3D) structures for Pd4 and Pd5. Furthermore, metal-substrate bonding prevails over metal-metal bonding for Pd cluster adsorbed on NiAl(1 1 0) surface. The density of states for Pd atoms of Pd/NiAl(1 1 0) system are strongly affected by their chemical environment. The magnetic feature emerged upon the adsorption of Pd clusters on NiAl(1 1 0) surface was due to the charge transfer between Pd atoms and the substrate. These findings may shade light on the understanding of the growth of Pd metal clusters on alloy surface and the construction of nanoscale devices.