The geometrical structures, relative stabilities, electronic and magnetic properties of small Pd n Ir (n = 1-8) clusters have been systematically investigated using density functional theory at the B3PW91 level. The optimised geometries show that the lowest-energy structures of Pd n Ir clusters prefer a three-dimensional configuration. The relative stability of these clusters was examined by analysis of the binding energies per atom, fragmentation energies, the second-order difference of energies and the HOMO-LUMO energy gaps as a function of cluster size. The obtained results exhibit that the Pd 2 Ir, Pd 3 Ir and Pd 5 Ir clusters are more stable than their neighbouring clusters. The energy gap of the Pd 2 Ir cluster is the largest of all the clusters (2.258 eV). In addition, the charge transfers, vertical ionisation potentials, vertical electron affinities and chemical hardness were calculated and discussed. The magnetism calculations indicate that the total magnetic moment of Pd n Ir clusters is mainly localised on the iridium atom for Pd 1-6 Ir clusters. Meanwhile, the 5d orbital plays the key role in the magnetic moment of the iridium atom.