The distribution of magnetic moments in the iron-rich intermetallic compound Lu 2 Fe 17 with Fe partly substituted by Ru has been investigated on Lu 2 Fe 16.5 Ru 0.5 by using several techniques. The crystal structure and temperature evolution of the magnetic structure was studied using high resolution and high flux neutron powder diffractometers. In contrast to the parent Lu 2 Fe 17 , which transforms on cooling from an antiferromagnetic to a ferromagnetic state, Lu 2 Fe 16.5 Ru 0.5 is an antiferromagnet (Néel temperature T N = 208 K) down to the lowest temperatures. The magnetic polarization at the lutetium L 2,3 absorption edges, iron K and ruthenium L 2 edges was studied by x-ray magnetic circular dichroism (XMCD) on a single crystal of Lu 2 Fe 16.5 Ru 0.5 in a magnetic field of 3 T, i.e., above the field-induced metamagnetic transition. The Ru XMCD signal proves the existence of induced magnetic polarization parallel to the dominant Fe sublattice magnetization. A corresponding theoretical analysis in the framework of the local spin density formalism is provided in order to discern the structural disorder effects and magnetism in the system.