In music theory, chord substitution is the technique of using a chord in the place of another - often related - chord, in a chord progression. Jazz musicians often substitute chords in the original progression to create variety and add interest to a piece. The substitute chord must have some harmonic quality and degree of function in common with the original chord, and often only differs by one or two notes. Scott DeVeaux describes a "penchant in modern jazz for harmonic substitution."
The ii-V substitution is when a chord or each chord in a progression is preceded by its supertonic (ii7) and dominant (V7), or simply its dominant. For example, a C major chord would be preceded by Dm7 and G7. Since secondary dominant chords are often inserted between the chords of a progression rather than replacing one, this may be considered as 'addition' rather than 'substitution'.
Chord quality alteration is when the quality of a chord is changed, and the new chord of similar root and construction, but with one pitch different, is substituted for the original chord, for example the minor sixth for the major seventh, or the major seventh for the minor.
The diminished seventh chord is often used in place of a dominant 7th chord. In the key of A Major the V chord, E dominant 7th (which is made up the notes E, G♯, B, and D) can be replaced with a G♯ diminished seventh chord (G♯, B, D, F). If the diminished seventh chord (G♯) is followed by the I chord (A), this creates chromatic (stepwise semitonal) root movement, which can add musical interest in a song mainly constructed around the interval of the fourth or fifth. The diminished seventh chord on the sharpened second scale degree, ♯IIo7, may be used as a substitute dominant, for example in C: ♯IIo7 = D♯-F♯-A-C♮ ↔ B-D♯-F♯-A = VII7.