AbstractThe electronic and magnetic properties of Nd₂Fe₁₇ and Nd₂Fe₁₇X₃ (X = C or N) compounds have been calculated using the first-principles density functional calculations. Among these, the nitrogen and carbon interstitial compounds exhibit all of the required properties such as a saturation moment of 1.6 T, Curie temperature of 700–750 K, however easy magnetic axis lies in the planar direction making them less attractive for permanent magnet applications. The calculated magnetocrystalline anisotropy energy is found to be −2.7 MJ/m³ for Nd₂Fe₁₇C₃ and −4.7 MJ/m³ for Nd₂Fe₁₇N₃. We further explored the possibility of changing the easy axis direction through La/Ce alloying at Nd site. Although the MAE is found to be smaller in magnitude for all the La/Ce alloys it still maintains planar direction.