Selective acetylene hydrogenation, a crucial industrial reaction, has been extensively studied for decades yet continues to present unresolved challenges. This work presents a comprehensive microkinetic model, derived from density functional theory calculations, aimed at providing a detailed understanding of the key impact of acetylene hydrogenation on the PdAg(111) surface. This with intermediate density(coverage) effects kinetic simulation, which considers both self-and crossinteractions among adsorbates and the influence of intermediate density on the transition states of each elementary step, is contrasted with a nonintermediate density effects kinetic calculation derived from energies determined at low density. Kinetic results reveal that the key intermediate CH 2 CH 3 in the formation of ethane is generated via CHCH 2 * + H* → CHCH 3 * + * and CHCH 3 * + H* → CH 2 CH 3 * + * rather than the hydrogenation of CH 2 CH 2 *. We demonstrate that the intermediate density effect kinetic model yields a turnover frequency (TOF) that is roughly 28 orders of magnitude greater than the TOF obtained from the nonintermediate density effect kinetic model. The microkinetic outcomes, including activity and selectivity, align satisfactorily with experimental. Extensive kinetic analyses have been performed, revealing that the introduction of Ag makes the rate controlling step of the reaction activity shift to hydrogen dissociation.