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Ab initio calculations of the electronic structure were performed for the silver palladium oxide, Ag2PdO2 by the full potential mixed linearized augmented plane wave and augmented plane wave plus local orbitals method (mixed LAPW/APW + lo) within the density functional theory and using the generalized gradient approximation (GGA96, Phys. Rev. Lett. 77 (1996) 3865) for the exchange-correlation potential. The lattice parameters were calculated from the ground-state total energy versus volume curve, and are in good agreement with the available experimental results. Our calculations of band structure predicted that the compound Ag2PdO2 has indirect band gap, and the Pd 4d states strongly hybridize with the O 2p states all over the valence bands and conduction bands. The valence bands are composed mainly of Ag, Pd 4d states and 0 2p states, while the conduction bands consist mainly of the Pd 4d states and 0 2p states. In addition, focusing on the calculation precision of the band gap, three different kinds of basis sets ("pure" LAPW, APW + lo and mixed LAPW/APW + lo) and three versions of exchange-correlation potential (GGA96, Phys. Rev. Lett. 77 (1996) 3865; LIDA, Phys. Rev. B 45 (1992) 13244; GGA91, Phys. Rev. B 46 (1992) 6671; Ziesche and Eschrig (Eds.), Electronic Structure of Solids '91, Akademie Verlag, Berlin, 199 1, p. 11) were chosen to calculate the band structure, the results show that the three basis sets lead to almost the same band gap values. (C) 2003 Elsevier B.V. All rights reserved.