First-principles theory of alloys is based on electronic structure calculation at the ground state and statistical mechanics calculation at finite temperatures. The former clarifies the stability of an ordered compound against competing phases and the latter is employed mainly to derive a phase diagram. The author performed a series of first-principles investigations on binary alloy systems including noble metal alloys, semiconductor alloys and Fe-based alloy systems by combining FLAPW electronic structure total energy calculations with Cluster Variation Method. Recently, the theoretical framework is extended even to calculate microstructural evolution process. By exemplifying Fe-based alloy systems, the progress of the first-principles calculation is reviewed and future prospect is discussed.