Anion photoelectron spectroscopic and theoretical studies were conducted for the PdH(-) and PdH3 (-) cluster anions. Experimentally observed electron affinities and vertical detachment energies agree well with theoretical predictions. The PdH3 (-) anionic complex is made up of a PdH(-) sub-anion ligated by a H2 molecule, in which the H-H bond is lengthened compared to free H2. Detailed molecular orbital analysis of PdH(-), H2, and PdH3 (-) reveals that back donation from a d-type orbital of PdH(-) to the σ* orbital of H2 causes the H-H elongation, and hence, its activation. The H2 binding energy to PdH(-) is calculated to be 89.2 kJ/mol, which is even higher than that between CO and Pd. The unusually high binding energy as well as the H-H bond activation may have practical applications, e.g., hydrogen storage and catalysis.