The rotational and vibrational state distribution of D 2 molecules desorbing from Pd͑100͒ is determined by tunable vacuum ultraviolet laser ionization spectroscopy. For the deuterium supply a permeation source is used operating at surface temperatures in the range from 400 to 850 K. The molecules are detected in rovibrational states up to (vЉ,JЉ)ϭ(0,12) and ͑1,8͒. A significant rotational cooling is observed together with a strong vibrational heating. These experimental results are found to be in good agreement with quantum-mechanical calculations based on an ab initio potential-energy surface. A consistent microscopic picture of the hydrogen reaction dynamics on Pd͑100͒ is established and thus a recent controversy about the application of the principle of detailed balance in the system D 2 /Pd(100) can be settled.