Diffusion mechanisms and rates of small Pd clusters supported on MgO have been calculated with density functional theory. Several
features of the energy landscape are qualitatively different from what has been assumed in previous theoretical models of growth dynamics. In particular, trimers and tetramers are highly mobile on the MgO(100) surface with the tetramer having the largest diffusion rate at room temperature. Surface vacancies are found to bind dimers and trimers less strongly than expected from theoretical models tuned to reproduce experimental growth data on surfaces with defects. The consequence of these calculations, and an emerging picture of metal island growth and sintering on oxide surfaces will be discussed.