Calculations including electron correlation have been performed for the Pd2N2 molecule. Geometry optimizations of different structures of this system were performed to find out if N2 is molecularly or dissociatively bound to Pd2. Two structures were found to be almost equally stable with calculated binding energies compared to the ground states of Pd2 and N2 of 15.1 and 15.7 kcal/mol, which should be lower bounds to the true values. The estimated upper bound for the binding energy is 20 kcal/mol. In the first structure, N2 is end-on bonded to the midpoint of Pd2, and in the second structure, N2 is side-on bonded with its axis parallel to the Pd-Pd axis. The N-N vibrational frequencies of these two structures were calculated to be 2057 and 1850 cm-1, respectively. The relevance of the present results for a recent molecular-beam study is discussed.