A theoretical study of geometry, stability, electronic structure, and magnetic property of neutral Al16M clusters with M being a first-row 3d transition metal atom, including Sc, Ti, V, Cr, Mn, Fe, Co, Ni, Cu, and Zn, are investigated in this theoretical study using quantum chemical approaches. The neutral Al16M clusters favor three kind of structures based on pure Al17 framework, including two exohedral doped isomers and one endohedral doped structure. There is a competition between the endoheral and the exohedral structures of Al16M with M being Ni, Cu, and Zn. The thermodynamic stability of encapsulated structure Al16Ni is confirm by the calculated average binding energy and embedded energy values. DFT calculation, however, indicate that the transition metal doping reduces the ionization potential of the pure aluminum clusters. Based on NBO calculations, a comprehensive picture of magnetic behavior is shown for Al16M clusters. Remarkably, the magnetism of the encapsualated Ni dopant is quenched in Al16 cage. Moreover, NBO calculations found that the 50-electron shells are completely preserved in both clusters Al16Sc and Al16Ti and the remaining unpaired electron(s) localize(s) mainly on 3d atomic orbitals of the transition metal dopant.