The electronic structure and local magnetic moment of BCT-FeN compounds were calculated by the first-principles self-consistent cluster method. For the alpha '-martensite, the author found that the magnetic moment of the first-neighbour Fe atoms of N was reduced while that of the second-neighbour Fe atoms was increased compared with those of pure BCC-iron; this was attributed to the concomitant effects of p-d interactions and tetragonal elongation of BCT-FeN, and was in good agreement with experiment. For the Fe₁₆N₂ structure, the calculated average magnetic moment is smaller than that of experiment.