Powder neutron diffraction studies were carried out on (Ho1-xErx)2Fe15Ga2C y (x=0, 0.5, 1; y =0, 2) with a view to study the effect of substitution of Ga for Fe and the insertion of carbon at the interstitial sites on the structural and magnetic properties. All Ga substituted compounds (y=0) possess hexagonal Th2Ni17 type structure (space group: P63/mmc). However, the carbides adopt rhombohedral Th2Zn17 type structure (Space group: R3m). The unit cell volume increases with Ga substitution as well as with interstitial modification by carbon. An increase in the Curie temperature of about 260 K is observed for the compound HoErFe15Ga2C2 vis-a-vis HoErFe17. The increase is attributed to the preferential occupancy of Ga atoms in 18/(12j) and 18h(12k) sites and the presence of interstitial carbon. The magnetization increases with carbon addition. X-ray diffraction studies on magnetically aligned samples and neutron diffraction studies show that the easy magnetization direction lies in the basal plane at room temperature. © 1999 American Institute of Physics.