IT has been long known that hydrogen can substantially reduce the mechanical stability of transition metals under tensile stress1-3. This phenomenon of 'hydrogen embrittlement' has important consequences for the safety of fusion reactors and for space technology; but there remains considerable uncertainty about its microscopic origin2,3. Here we report the results of a study of fracture of hydrogen-loaded palladium under tensile stress which uses Parrinello-Rahman molecular dynamics based on a many-body alloy hamiltonian. A rather unexpected result is that the apparent hydrogen embrittlement results from a local enhancement of ductility in hydrogen-saturated regions of the metal which causes a reduction of the critical tensile stress at which failure occurs.