Density functional theory has become a popular method for studying the electronic structure and potential energy surface properties of large molecules. Its accuracy has been extensively validated for organic and organometallic systems. However, this is not yet the case for classical inorganic compounds with biological importance. This study presents a systematic evaluation of modem DFT calculations using the spectroscopically well understood molecule [CuCl4](2-). The BP86 and B3LYP functionals with saturated basis sets give a groundstate bonding description that is too covalent, and the calculated ligand-field and ligand-to-metal charge transitions are shifted to higher and lower energies, respectively, relative to experiment. A spectroscopically adjusted hybrid DFT functional (B(38HF)P86) was optimized to match the ground-state experimental Cu spin density (0.62 +/- 0.02e). This adjusted hybrid functional also gives an improved excited-state description with a rms error in transition energies of 1000 cm(-1). The potential energy surface of the [CuCl4](2-) was studied in gas and condensed phases. In the gas phase, the tetracronal (D-4h) geometry was found to be a transition state along the b(2nu) distortion mode connecting distorted tetrahedral (D-2d) structures. The replacement of 38% local + nonlocal DF exchange with HF exchange improves the calculated Cu-Cl bond lengths by 0.03 Angstrom, increases the frequency of the a(Ig) mode by 30 cm(-1) and changes the energetics by 3 kcal mol(-1) relative to the BP86 method. It is found that the crystal lattice stabilizes the D-4h [CuCl4](2-) structure through van der Waals and hydrogen bonding interactions worth about 10 kcal mol(-1) demonstrating the role of the environment in determining the geometric and electronic structure of the Cu site. The importance of the type and the amount of DF correlation has been investigated and alternative nonhybrid methods of adjusting the ground-state description have been evaluated.