We study the strain relaxation mechanisms of Cu on Pd͑111͒ up to the monolayer regime using two different computational methodologies, basin-hopping global optimization and energy minimization with a repulsive bias potential. Our numerical results are consistent with experimentally observed layer-by-layer growth mode. However, we find that the structure of the Cu layer is not fully pseudomorphic even at low coverages. Instead, the Cu adsorbates forms fcc and hcp stacking domains, separated by partial misfit dislocations. We also estimate the minimum energy path and energy barriers for transitions from the ideal epitaxial state to the fcc-hcp domain pattern. Introduction. Metallic surfaces and nanostructures are essential systems for heterogeneous catalysis. Combination of two metals can lead to significant improvements in the variability and frequency of the reactions catalyzed. To prepare controlled nanostructures, it is crucial to understand the growth and stability of heteroepitaxial metal systems, in particular for close-packed surfaces. On fcc͑111͒ it has been found that to release the stress, the overlayer can adopt several alternative strategies which lead to a structure of domains separated by partial misfit dislocations.1-7 The domains correspond to the two favorable sites, fcc and hcp. This behavior is expected to be ubiquitous and should not depend strongly on the interaction potentials or the overlayer-substrate mismatch.