A first-principles based stochastic kinetic algorithm is developed and used to monitor the molecular transformations associated with the decomposition acetic acid on Pd(111). Ab initio quantum chemical studies were used to calculate the adsorption energies and key activation barriers. These results are used to modify a bond order conservation approach that subsequently provides the activation barriers for additional steps and for coverage effects internal to the simulation. The simulation of acetic acid temperature-programmed desorption appears to represent experiments satisfactorily, especially considering the first-principles foundation of the approach. With initial adsorption at 100 K, acetic acid desorption occurs at 190 and 260 K in the absence of oxygen, without acetic acid decomposition. In the presence of 0.05 ML of preadsorbed oxygen, acetic acid desorbs in three peaks at 190, 260, and 350 K, with decomposition to form CO2 at 350 K. The peak positions and the peak widths compare well with those from the experiment which occur at 205, 270, and 330 K.1 Acetate is found to island on the surface. A more advanced interaction model suggests that oxygen atoms surround these acetate islands. The simulation results suggest that a low temperature path to form small (<5%) amounts of atomic oxygen on the surface is present. This chemisorbed oxygen subsequently affects the low-temperature desorption spectra.