We find that the magnetic properties of a rare-earth material GdPd3 are determined by the occupancy of the strongly localized 4f electronic states near the Fermi level. In our calculation, we can find that there are two types of f electrons. The first one is the localized core-like f electrons which determine the valency and the second one is the delocalized band-like f electrons that are formed through hybridization with the s-d bands which are important for the bonding. GdPd3 has high magnetic moments around 7.0  and they come from the occupancy of the strongly localized 4f electronic states near the Fermi energy.