Total energy calculations of C60 nano-cage doped with transition metals (TM¼Fe and Co atoms) endohedrally, exohedrally, and substitutionally were performed using the density functional theory with the generalized gradient approximation along five radial paths inside and outside of the fullerene. The full geometry optimization near the minimum of the binding energy curves shows that the most stable position of the Fe atom in the TM@C60 system is below the carbon atom, while that of the Co atom is below the middle of the double bond between the carbon atoms. Also the most stable position of both TM atoms in TM: C60 systems is above the double bond. Results reveal that for all examined structures, the Co atom has larger binding energy than that of Fe atom. It is also found that for all complexes additional peaks contributed by TM-3d, 4s and 4p states appear in the highest occupied molecular orbital (HOMO) and the lowest unoccupied molecular orbital (LUMO) gap of the host cluster. The mid-gap states are mainly due to the hybridization between TM-3d, 4s and 4p orbitals and the cage p orbitals. Because of the interaction between the TM atom and the fullerene cage, the charge depletion of TM-4s orbital to TM-3d and 4p orbitals occurs and the magnetic moment of the incorporated TM atom reduces in all cases. Furthermore, the Mulliken charge population analysis shows that overall charge transfer occurs from the TM atom to the cage

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