Using the self-consistent full-potential linearized augmented plane wave method, we carry out the electronicstructure calculations of MgCNi3 in the local spin density approximation (LSDA) of the density-functional theory.The LSDA solution is metal. The magnetic moment on the Ni ion is only 0. 014tμB. There is a peak in the densityof state just below the Fermi energy (Ef), which can be strongly correlated with various instabilities. Afterincluding the strong electron-electron correlation effects on the Ni 3d state by the on-site Coulomb interactioncorrection, the density of state is greatly redistributed, and the peak just below Ef disappears. The magneticmoment on the Ni ion becomes 0.66μB. Both LSDA and LSDA+U have shown that the electronic states nearthe Fermi surface are dominated by the 3dt orbital of Ni.