Using first-principles methods, we studied the band and electronic structures and magnetism of Fe-doped LiNbO3 (LN). It was found that the substitution of Li with Fe in LN was more preferable in terms of energy than the substitution of Nb with Fe and also induced stronger ferromagnetism. The substitution of one Fe atom for one Li atom in a conventional cell would induce an atomic magnetic moment of 5.18 mu(B). The main feature that allows Fe substitution for Li is the strong interaction between Fe and its neighboring Nb, which results in strong spin coupling between the two and throughout the whole crystal. Theoretical predictions were tested by experiments in which we doped Fe into LN using ion-beam implantation. It was found that Fe substituted Li fairly well when the doping content was 1 at.%. The obtained maximum atomic magnetic moment arrived to 3.33 mu(B)/Fe. The discrepancies among the theoretical and experimental results were analyzed. (C) 2012 Elsevier B.V. All rights reserved.