Someone dies to a boss three floors into a Palworld dungeon, respawns back at their base with an empty inventory, and pings your Discord asking what just happened to their gear. Maybe their Pals are gone too. You check the rules you set months ago and realize you never actually confirmed what Death Penalty does on your server, only that it exists.
That single dropdown decides the outcome of every death on your world: nothing, a stack of potions, a full loadout, or a Pal team along with it. Palworld also layers a separate PvP system on top, one that changes who else can profit from a loss like that. This guide walks through exactly what each of Palworld’s Death Penalty options does, which one fits the server you are actually running, how PvP really behaves once you switch it on, and where to set both correctly in your Apex panel.
What the Death Penalty Options Do
Palworld’s dedicated server settings expose four Death Penalty values, and the gap between the mildest and the harshest is bigger than most players expect. Here is exactly what each one does, according to Palworld’s own dedicated server documentation.
| Option | What Happens When a Player Dies |
|---|---|
| None | Nothing drops. The player respawns with their full inventory, equipped gear, and active Pal party intact. |
| Item | Inventory items drop. Equipped weapons, armor, and accessories stay on the player, and so does their active Pal party. |
| ItemAndEquipment | Inventory items and everything equipped both drop. The active Pal party is unaffected. |
| All | Inventory items, equipped gear, and the player’s active Pal party all drop. |
Dropped items and Pals do not just vanish. They land in a marker at the death location that the player, or in a PvP world potentially someone else, can walk up to and loot back. That changes if Permanent Pal Loss on Death is switched on elsewhere in the same settings list: with that toggle enabled, a Pal lost under All is gone for good instead of sitting there waiting to be recovered.
Patch notes for the version 1.0 update, which launched July 10, 2026, describe new dedicated servers defaulting to a lighter penalty: equipped gear no longer drops automatically on Normal difficulty the way it used to. Don’t assume that applies to your server, especially if it existed before that update or anyone has touched the setting since. Check what your Death penalty field actually says using the steps further down.
Which Death Penalty Fits Your Server
The right choice depends on the world you are actually running, not a universal best answer.
- Relaxed PvE or a family server. None or Item keeps a death from ending someone’s session. Newer players, and younger ones especially, do better with a penalty that stings without erasing hours of progress.
- Co-op with friends. Item or ItemAndEquipment adds real stakes; a bad pull against a boss should cost something, without the risk of losing a carefully bred Pal to one mistimed jump off a cliff.
- Hardcore or high-stakes PvE. All, often paired with Permanent Pal Loss on Death and Enable Hardcore Mode, makes every fight matter. This combination suits a small, committed group that wants Palworld’s survival side taken seriously, not a casual building server.
- PvP-focused servers. All or ItemAndEquipment gives a loss weight for the winning guild too, since a defeated player’s drop becomes lootable rather than a minor inconvenience. More on how that works below.
How to Change the Death Penalty on Your Apex Server
Head towards your Apex server panel and open Server Configuration, then Config Files, then Palworld Game Settings, the full settings editor for your world. The Death penalty option sits below the rate multiplier fields, roughly a third of the way down a long list.
Open the dropdown, pick the option that matches the server style you settled on above, and save; nothing takes effect until you restart the server, so do that before telling your players the new rule is live.
The Difficulty dropdown near the top of that same settings editor is a separate control from Death Penalty. If you have not looked at it yet, our guide to changing the difficulty of your Palworld server covers what it does. And if the change does not seem to stick after a restart, our roundup of Palworld server common issues, solutions, and bugs covers the most frequent causes.
How Palworld PvP Actually Works
Palworld has two different kinds of PvP, and only one of them is yours to control. The first is the Arena, a built-in mode where players on your server opt into matched 4v4 battles against each other. It has run independently of any server setting since the Tides of Terraria update, so it stays available whether or not you touch your config. The second, the one this section is about, is open-world PvP: whether players can fight each other out in the world itself.
That open-world switch is Is PvP, sitting further down the same Palworld Game Settings list, directly below Is Multiplay. Turn it on, and the entire world becomes a place where any player can potentially fight any other, guild against guild, for as long as the server stays up.
But Is PvP alone is not the whole story. Getting players to actually damage each other also needs Enable Player to Player Damage switched on, and letting your base Pals fight back against a trespassing player needs Enable Defense Other Guild Player too, according to Palworld’s PvP documentation. Skip either one, and Is PvP alone leaves your world looking hostile without actually being it: players can wander into each other’s bases, but nobody can land a hit.
Two more settings shape what PvP actually feels like once it is live. Enable Friendly Fire is a separate axis entirely: it controls whether members of the same guild can hurt each other, not whether rival guilds can. A server can run PvE-only with friendly fire on, letting a wide-swing weapon clip a teammate by accident, or run full PvP with friendly fire off, so guildmates stay safe from each other while strangers are not. Can Pickup Other Guild Death Penalty Drop decides whether a rival can walk up to the marker left by whoever they just killed and take what dropped. Enable it, and combined with a harsher Death Penalty, a PvP loss becomes someone else’s gear.
Don’t confuse any of this with Enable Invader Enemy, a setting that controls hostile Pal invasions on your base instead. That’s PvE, not PvP, and it comes with its own performance considerations worth handling on its own.
One more distinction worth keeping straight, since your community will ask: the Arena has the opt-in PvP mode described above, but it also has Arena Legend, added in the 1.0 update, which is not player combat at all. Arena Legend is a ranked ladder against AI-controlled trainers, not other players, according to patch notes covering the update. So players who want to fight each other have two real routes, the Arena’s matched battles or the open-world settings above, while Arena Legend is a solo climb against the game.
Recommended Setups
These three combinations cover most of what server owners actually ask for.
Family or casual co-op. Death Penalty: Item. Is PvP: disabled. Nobody loses a bred Pal to a bad landing, and death still costs something.
Hardcore PvE survival. Death Penalty: All, with Permanent Pal Loss on Death and Enable Hardcore Mode both on. Is PvP stays disabled. The challenge here is the world, not other players, and this setup suits a small, committed group that wants Palworld’s survival side taken seriously.
Competitive PvP guild server. Is PvP, Enable Player to Player Damage, and Enable Defense Other Guild Player all enabled. Death Penalty: All or ItemAndEquipment, with Can Pickup Other Guild Death Penalty Drop turned on so a won fight actually pays off. Leave Enable Friendly Fire off unless your guilds specifically want the extra chaos.
Whichever setup fits, our Palworld server hosting plans give you full panel access to change any of these Palworld server settings the moment your community’s preferences shift.
Palworld Death Penalty and PvP FAQ
Does the Death Penalty Setting Affect Pals Too?
Only the All option touches a player’s active Pal team. None, Item, and ItemAndEquipment all leave Pals with the player no matter what else drops. Even under All, a lost Pal sits in the death marker and can be recovered, unless Permanent Pal Loss on Death is separately switched on, which makes that loss permanent.
Can You Turn PvP Off Completely?
Yes. Set Is PvP to disabled in the Palworld Game Settings editor and restart the server. With it off, players cannot damage each other out in the open world, and the base-versus-player defense settings have nothing left to act on. The one exception is the Arena’s opt-in PvP mode, which runs on its own and ignores this setting; a player still has to choose to enter it, so it will not catch out anyone who just wants to build. Open-world PvP is a dedicated-server setting, framed in Palworld’s own server documentation as something a dedicated server enables, not an option inside a solo or non-dedicated save.
Does Changing the Death Penalty Wipe Any Existing Data?
No. Changing Death Penalty only changes what happens the next time someone dies. It does not touch existing inventories, bases, or save data. If you actually want to clear a player’s progress and give them a fresh start, that is a different tool entirely, covered in our guide to resetting player data on a Palworld server.
Does Palworld Have a Real PvP Arena?
Yes, and it is easy to confuse with a mode that isn’t. The Arena has a real PvP mode where players on your server opt into matched 4v4 battles against each other, on its own lobby and separate from your Is PvP server setting. Arena Legend, added in the 1.0 update, is the part that is not player combat: a ranked ladder against AI-controlled trainers rather than other people. Players who want to fight each other have two routes, the Arena’s matched battles or open-world PvP through the settings above.
Do These Settings Apply Immediately, or Do I Need to Restart?
Restart. Death Penalty and every PvP setting covered here live in the Palworld Game Settings config file, and changes there load when the server starts, not while it keeps running. Save your change, then restart the server before telling your players anything is different.
