With the use of a self-consistent tight-binding scheme, local electronic densities of states (LDOS) are calculated for commensurate (C) Pd* (110) and incommensurate (IC) Pd(111) layers on Nb(110). At low coverages (<1) Pd induces a Pd-Nb resonance near the bottom of the Nb d band. In agreement with the experimental results this resonance shifts to lower binding energy as the coverage is increased. Comparing detailed features of the LDOS with the photoemission data we predict a C-IC structural transformation for approximately one monolayer of Pd. This we also conclude from a simple interface energy calculation. The d-electron charge transfer across the interface and the LDOS of Pd at the Fermi energy (EF) are small. The latter, however, increases with the Pd coverage. The LDOS of the top Pd layer is nearly the same for Pd(111) on Pd* (110)-Nb(110) or Pd(111)-Nb(110) interfaces and in all cases there is a significant decrease of Nb d states near the EF. This shows that the LDOS is mainly perturbed at the interface. Implications of these results for hydrogen uptake and work-function changes are discussed. {\textcopyright} 1983 The American Physical Society.