The modification of the potential-energy surface (PES) of H-2 dissociation over Pd(100) as induced by the presence of a (2 x 2) S adlayer is investigated by density-functional theory and the linear augmented plane wave method. It is shown that the poisoning effect of S originates from the formation of energy barriers hindering the dissociation of H-2. The barriers are in the entrance channel of the PES and their magnitude strongly depends on the lateral distance of the H-2 molecule from the S adatoms.