The structures of two ultrathin Pd nanowires were predicted by the simulated annealing basin-hopping method (SABH) with the tight-binding potential. Their material properties for applications to the hydrogen economy were further examined by density functional theory (DFT) calculation and DFT molecular dynamics (DFT-MD) simulation. In terms of thermal stability, these two Pd nanowires are still very stable at temperatures as high as 400 K. For the dissociation of hydrogen molecules, results show the dissociation is almost barrierless, and their catalytic reactivity is very similar to the Pd bulk material. The thermal stability of the H atom within these Pd nanowires was also investigated by DFT-MD, with results showing that the H atom can only stay within Pd nanowires at temperatures much lower than room temperature (298 K). This phenomenon is very different from that of H atoms within Pd bulk material or other reported nanomaterials, leading to hydrogen embrittlement, the main drawback for Pd materials applications. Our results reveal that these two ultrathin Pd nanowires not only possess the same excellent catalytic activity for hydrogen molecules as the bulk Pd material or other Pd nanomaterials, but also avoid the hydrogen embrittlement plaguing Pd bulk materials, which is the main limit to its applications in such things as hydrogen purification, storage, and detection.