We report first principles density functional theory studies on the basic ground state characteristics, dynamic properties, and the electronic structure of guanine crystals. The effect of water molecules within the crystal is studied in detail, and we discuss their influence on the structural, vibrational, and electronic properties. The geometries calculated for various crystal structures are compared with gas-phase calculations and available experimental data. Phonon frequencies and eigenvectors are predicted for intermolecular and intramolecular lattice vibrations. Vibrational and electronic density-of-states are presented and analyzed. The electronic band structure near the fundamental gap is calculated from the Kohn-Sham approach. We find that the former molecular HOMO states form a dispersive band in the pi-pi stacking direction upon condensation resulting in a large bandwidth of 0.83 eV. Consequences for the charge transport in layered van der Waals bonded organic molecular crystals are discussed.