The decomposition of ethene on the Pd(111) surface was studied at effective pressures in the 10(-8) to 10(-7) mbar range and at sample temperatures between 300 and 700 K, using an effusive capillary array beam doser for directional adsorption, LEED, AES, temperature programmed reaction, and TDS. In the temperature range of 350-440 K increasingly stronger dehydrogenation of the ethene molecule is observed. Whereas at 350 K an ethylidyne adlayer is still present after adsorption, already at temperatures around 440 K complete coverage of the surface by carbon is attained, while the bulk still retains the properties of pure Pd. Beyond 440 K a steady-state surface C coverage is established, which decreases with temperature and is determined by detailed balancing between the ethene gas-phase adsorption rate and the migration rate of carbon into the Pd bulk. This process gives rise to the formation of a "partially carbon-covered Pd(x)C(y) surface". Above 540 K the surface-bulk diffusion of adsorbed carbon becomes fast, and in the UHV experiment the ethene adsorption rate becomes limited by the ethene gas-phase supply. The carbon bulk migration rate and the steady-state carbon surface coverage were determined as a function of the sample temperature and the ethene flux. An activation energy of 107 kJ mol(-1) for the process of C diffusion from surface adsorption sites into the subsurface region was derived in the temperature range of 400-650 K by modeling the C surface coverage as a function of temperature on the basis of steady-state reaction kinetics, assuming a first-order process for C surface-subsurface diffusion and a second-order process for C(ads) formation by dissociative C2H4 adsorption.