The ab initio study of electronic and magnetic properties of (Gd1−xYx)7Pd3 alloys are presented. The electronic structure calculations were performed using FP-LAPW method. Basing on the ground-state single-electron results the many particle sf model for disordered alloy with strongly correlated band electrons was parameterized. The concentration dependence of the band structure, magnetic moment, and the Curie temperature is presented and discussed in reference to experimental data.