- Under temperature or pressure tuning, tetragonal EuPd2Si2 is known to undergo a valence transition from nearly divalent to nearly trivalent Eu accompanied by a volume reduction. Albeit intensive work, its origin is not yet completely understood. Here, we investigate the mechanism of the valence transition under volume compression by density functional theory calculations (DFT). Our analysis suggests that the transition is a consequence of an enhanced c−f hybridization between localized Eu 4f states and itinerant conduction states (Eu 5d, Pd 4d, and Si 3p) where the interplay of the electronic bandwidth, crystal field environment, Coulomb repulsion, Hund's coupling and spin-orbit coupling plays a crucial role for the transition to happen. The change in the electronic structure is intimately related to the volume reduction where Eu-Pd(Si) bond lengths shorten. In a next step we compare our DFT results to surface-sensitive photoemission data in which the mixed-valent properties of EuPd2Si2 are reflected in a simultaneous observation of divalent and trivalent signals from the Eu 4f shell.