The electronic structures of the metallic and insulating phases of the alloy series Ca_2-xSr_xRuO₄ (0 ≤x ≤ 2) are calculated using LDA, LDA+U and Dynamical Mean-Field Approximation methods. In the end members the groundstate respectively is an orbitally non-degenerate antiferromagnetic insulator (x = 0) and a good metal (x = 2). For x > 0.5 the observed Curie-Weiss paramagnetic metallic state which possesses a local moment with the unexpected spin S = 1/2, is explained by the coexistence of localized and itinerant Ru-4d-orbitals. For 0.2 < x < 0.5 we propose a state with partial orbital and spin ordering. An effective model for the localized orbital and spin degrees of freedom is discussed. The metal-insulator transition at x = 0.2 is attributed to a switch in the orbital occupation associated with a structural change of the crystal.