Scanning tunneling microscopy has been used for real-space imaging of the initial interaction of palladium with the Si(111)-(7×7) surface at room temperature. The nucleation of silicide is spatially localized and occurs only in the faulted half of the (7×7) unit cell. Large-scan-area images have been statistically analyzed to determine the subsurface extension of the silicide nuclei and the nature of growth as a function of coverage and island size. Steps are found to have no influence on the nucleation at this temperature. © 1988 The American Physical Society.