The mechanism underlying the hydrogen-induced embrittlement effect in FeAl has been investigated using a local density functional total-energy approach. The bonding characteristics, the bond and cleavage strength between iron and aluminum layers, and the surface energy with and without interstitially absorbed H are calculated from first-principles band-structure and atomic-cluster methods. Our unique combination of techniques permits the simultaneous study of the metallic and localized bonding effects on an equal footing. Results from this study show that FeAl (in the absence of H) is intrinsically highly resistant to cleavage fracture in terms of the high theoretical cleavage strength. Hydrogen locally dilates the Fe–Al lattice, and this is accompanied by a sizable decrease in Fe–Al cleavage (or cohesive) strength. Our results suggest that the underlying mechanism of H-embrittlement in aluminides is a depletion of d-bonding charge on the Fe site resulting from the charge transfer from Fe to H. Results also indicate that the H-embrittlement effect is greater for H adsorbed in Fe-rich sites.