We investigate the structure and magnetic characteristics of small metal nanoclusters consisting of Gd and/or Fe within the LIDA + U density-functional approach. Pure Gd and Fe nanoclusters have larger ferromagnetic moments than their respective bulk counterparts. Among binary Fe-Gd nanoclusters of dimers, trimers, and tetramers, the Fe-rich nanoclusters are energetically favored with relatively small ferromagnetic moments and the Gd-rich nanoclusters prefer antiferrimagnetic spin configurations, where Gd sites are spin up and Fe sites are spin down. (C) 2009 Elsevier Ltd. All rights reserved.