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The electronic structure of strained and unstrained Gd(0001) has been studied with spin-polarized photoemission spectroscopy and spin-polarized inverse photoemission spectroscopy. In this work, we observed that relaxation of the expansively strained in-plane crystal lattice constant, of Gd(0001) on Mo(112), significantly diminishes the differences in the electronic structure from that observed for Gd(0001) grown on W(110). The defects that are incorporated in the Gd films, with increasing film thickness, lead to an in-plane lattice relaxation. Such thickness dependent strain relief results a loss of net polarization for Gd(0001) grown on Mo(112) compared to the relatively unstrained Gd(0001) films grown on W(110).