In ordered overlayers of adsorbed gases on metal surfaces, high coverage situations can lead to overlap between orbitals on adjacent species and hence to adsorbate band formation. We conclusively demonstrate the existence of this effect in chemisorption by examining the dispersion of the 4α level in the u.v. photoelectron spectrum of the CO/Pd (100) system. The results agree well with a first principles extended tight binding calculation of the two-dimensional band structure. © 1979.