Magnetic susceptibility χ, isothermal magnetization M, and specific heat C of a diluted 4 f 3 system Y 1−x Nd x Co 2 Zn 20 were measured. For x = 0.19, χ(T) in B || [100] = 0.1 T follows the Curie-Weiss law between 50 and 300 K. The effective magnetic moment of 3.95 µ B /Nd and the paramagnetic Curie temperature of −13.4 K, respectively, indicate the trivalent state of the Nd ion and antiferro-type interaction between the Nd magnetic moments. The magnetic specific heat divided by temperature, C m /T , for x = 0.20 shows a broad maximum at 13 K, which can be moderately reproduced by the CEF parameters for NdCo 2 Zn 20 , indicating the Γ 6 doublet ground state. The set of data of M(B) for B || [100], B || [110], and B || [111] are fitted well using the CEF parameters and the ferro-type intersite interaction. No phase transition was observed down to the lowest temperature of 0.068 K. C m /T for B = 0 diverges on cooling for T ≤ 2 K more strongly than −lnT. The maximum in C m /T at B ≥ 2 T is well reproduced by the calculation with the CEF model including the Zeeman effect. The magnetic entropy S m for B = 0 is 0.15Rln2 at T = 0.068 K, indicating the masking of the two-channel Kondo effect by the intersite interaction between the Nd magnetic moments.