Lithiation of TiO2 has been shown to enhance the storage of hydrogen up to 5.6 wt% (Hu et al. J Am Chem Soc 128:11740–11741, 2006). The mechanism for the process is still unknown. In this work we have carried out a study on the adsorption and diffusion of Li atoms on the surface and migration into subsurface layers of anatase (101) by periodic density functional theory calculations implementing on-site Coulomb interactions (DFT+U). The model consists of 24 [TiO2] units with 11.097 × 7.655 Å2 surface area. Adsorption energies have been calculated for different Li atoms (1–14) on the surface. A maximum of 13 Li atoms can be accommodated on the surface at two bridged O, Ti-O, and Ti atom adsorption sites, with 83 kcal mol−1 adsorption energy for a single Li atom adsorbed between two bridged O atoms from where it can migrate into the subsurface layer with 27 kcal mol−1 energy barrier. The predicted adsorption energies for H2 on the lithiated TiO2 (101) surface with 1–10 Li atoms revealed that the highest adsorption energies occurred on 1-Li, 5-Li, and 9-Li surfaces with 3.5, 4.4, and 7.6 kcal mol−1, respectively. The values decrease rapidly with additional H2 co-adsorbed on the lithiated surfaces; the maximum H2 adsorption on the 9Li-TiO2(a) surface was estimated to be only 0.32 wt% under 100 atm H2 pressure at 77 K. The result of Bader charge analysis indicated that the reduction of Ti occurred depending on the Li atoms covered on the TiO2 surface.