The thermal decomposition of iodomethane on clean, I-precovered and CO-precovered Pd{111} is investigated using thermal desorption spectroscopy (TDS) and X-ray photoelectron spectroscopy (XPS). On a clean surface, CH3I decomposes to produce CH3,ads and I(ads) at temperatures between 175 and 200 K. No evidence of C2-hydrocarbon formation is observed. The CH3,ads produced by C-I bond activation hydrogenates to desorb as CH4 at 200 K. The I(ads) remains on the surface below 850 K and completely desorbs by 1100 K. The I(ads) behaves as a site blocker which removes activation sites for C-I bond activation without changing the chemical activity of CH3,ads. Compared with the results obtained from other laboratories, the thermal decomposition of CH3I on Pd is a strong structure-sensitive reaction. It was found that the C-I bond breaks at a temperature as low as 95 K on Pd{100}, whereas the C-I bond cleavage can only be observed at temperatures above 175 K on Pd{111}. The presence of CO on Pd{111} inhibits the C-I bond breaking which simultaneously influences the thermal stability of CH3,ads. Depending upon the initial coverage of CO, the hydrogenation of CH3,ads to CH4 occurs at temperatures which are up to 80 K higher than for the clean surface. The enhancement of the thermal stability of CH3,ads may result from both site blocking and electronic effects induced by preadsorbed CO.