NaxWO3 and NaxTayW1-yO3 bronzes are studied near the metal-nonmetal transition (MN) using core-level and valence-band photoelectron spectroscopy with synchrotron radiation. It is shown that in the semiconducting composition an impurity band with a width constant with x-y develops in the matrix p-d gap and that the density of states at the Fermi level is finite for compositions on both sides of the MN transition. These results show that the MN transition is due to localization in an impurity band in a pseudogap. This impurity band merges with the matrix conduction band when x-y increases. © 1985 The American Physical Society.