The composition-dependent properties and their correlation with the phase stability of Fe75+xPd25−x (−10.0≤x≤10.0) alloys are systematically investigated by using first-principles exact muffin-tin orbitals (EMTO)-coherent potential approximation (CPA) calculations. It is shown that the martensitic transformation (MT) from L12 to body-centered-tetragonal (bct) occurs in the ordered alloys with about −5.0≤x≤10.0. In both the L12 and bct phases, the evaluated a and c/a agree well with the available experimental data; the average magnetic moment per atom increases whereas the local magnetic moments of Fe atoms, dependent on both their positions and the structure of the alloy, decrease with increasing x. The tetragonal shear elastic constant of the L12 phase (C′) decreases whereas that of the bct phase (Cs) increases with x. The tetragonality of the martensite (|1−c/a|) increases whereas its energy relative to the austenite with a negative value decreases with Fe addition. All these effects account for the increase of MT temperature (TM) with x. The MT from L12 to bct is finally confirmed originating from the splitting of Fe 3d Eg and T2g bands upon tetragonal distortion due to the Jahn-Teller effect.