AbstractWe consider the formation and the Kondo effect of local magnetic moments in the Anderson‐Hubbard model with off‐diagonal disorder. The existence of moments at sites weakly coupled to the environment is deduced in effective medium approximation. The distribution of moments is calculated both deep in the metallic phase and near the metal‐insulator transition. We discuss the Kondo quenching of the moments and derive a distribution of local Kondo tempera