We have investigated the electronic structure and surface magnetism of YFe2(001) by using the all-electron full-potential linearized augmented plane-wave method within the generalized gradient approximation. Both the Y-terminated (Y-term) and the Fe-terminated (Fe-term) surfaces were taken into account. It is found that the magnetic moments of the Fe atoms for the surface layer of the Fe-term and the subsurface layer of the Y-term are enhanced to 2.73 and 2.52 µB with respect to that of the center layer. The magnetic moments of the Y atoms couple antiferromagnetically to neighbour Fe atoms and the values are order of ∼0.1 µB. The enhancements of Fe magnetic moments for the surface of Fe-term and subsurface of Y-term are discussed with the calculated spin-densities and the spin-polarized layer-projected density of states. (© 2004 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim)