A theoretical study of the atomic and electronic structure of the Pd on Nb(110) interface is presented. In the commensurate (C) phase the interaction of Pd with Nb is strong and the Pd d band shows two resonant d states. The density of states at the Fermi energy is small but increases in the incommensurate (IC) structure. The C-IC transformation is predicted to occur when some Pd atoms occupy sites in the second layer. {\textcopyright} 1982 The American Physical Society.