Measurements of the magnetic susceptibility, crystal and electronic structure for YxGd1-xNi5 (x=0.0, 0.2, 0.5, 0.8, 1.0) compounds with the CaCu5 type of crystal structure are reported. The substitution of Y for Gd atoms results in a decrease of the volume unit cell and the Curie temperature. In the paramagnetic range (300-650K) the DC susceptibility follows Curie-Weiss law for all investigated compounds. The effective moment deduced from the Curie constant decreases rapidly with Y concentration. The saturation magnetic moment for GdNi5 shows negative polarization of Ni 3d band induced by interactions with Gd 5d states. Both valence band and core level X-ray photoelectron spectra are analyzed. The presence of the satellite structure in Ni2p core level suggests the magnetic polarisation of Ni 3d states which dominate the valence band in all investigated compositions. The experimental investigations were completed with the band structure calculations. In all cases the calculations were based on KKR and KKR-CPA methods. Satisfactory agreement between the measured spectra and those obtained from the calculated electronic structure has been achieved.