One interesting feature of diamides is that, in principle, they can exhibit many of the characteristic optical properties of a helical polypeptide. Diketopiperazine (dioxopiperazine or cyclic diglycine) can perhaps be considered to be the simplest diamide, and the constraints on its conformation make it an attractive candidate for the theoretical study of the interaction between amide chromophores. We have applied correlated methods to compute ab initio the gas phase conformation of diketopiperazine, its vibrational spectrum, and its electronic spectrum. Using MP2 and density functional B3LYP methods, the boat conformer of the molecule and its nonsuperimposable mirror image were identified as the lowest energy structures. The planar structure was found to be a transition state. Vibrational spectra were computed for the boat and planar structures. The two boat enantiomers lie in a broad well, separated by a very small barrier corresponding to the planar form. For computational tractability, and as the barrier height is probably within the error of the calculation, we take the planar form as a representative conformation. We have computed its electronic spectrum using the complete active space (CAS) SCF method and multiconfigurational second-order perturbation theory (CASPT2). The calculated absorption spectrum is dominated by a pi pi* transition at 6.0 eV, with an oscillator strength in the range f = 0.46 to 0.58, in reasonable accord with the experimental observation of a band at 6.4 eV with an oscillator strength of f= 0.38 +/-0.10. The interaction between the two amide groups is reflected in the splitting between the two pi pi* transitions, computed by CASPT2 to be 1.1 eV. Simply considering the interaction between the two amides as electrostatic, and treating diketopiperazine as a dimer of acetamide or a dimer of N-methylformamide, gives exciton splittings of 0.8 and 0.9 eV, respectively. Thus, we conclude that electrostatics dominate this interaction.