AbstractWe have determined the localization threshold in a partially filled and doubly degenerate model of correlated electrons. Particular emphasis is put on a non‐integer band filling n ≥ 1, when the system decomposes into the localized and the itinerant subsystems. A simultaneous transition to the ferromagnetic state is discussed as driven by the Hund's rule coupling combined with the effective field coming from the correlations. Dependence of the quasiparticle mass on the spin direction appears naturally in the spin‐polarized phase and is attributed to the electron correlation effects, as is also a metamagnetic transition in an applied field. Although the main results have been obtained within the saddle point slave‐boson approach, their qualitative features are discussed in general terms, i.e. as a transition from quantum‐mechanical indistinguishability of particles forming the Fermi fluid to a two‐component situation. (© 2007 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)