The structure of Cd(OH)(2) was determined by X-ray diffraction on powder crystals and by calculation using the full-potential linearized augmented plane wave method. Good agreement between the two results was found. The chemical bonding is characterized by the interactions of the OH- group with Cd2+ which is not only electrostatic but shows some polarization or covalent admixtures and by the covalent bond in the OH- group. The electric field gradient (EFG) was calculated and compared with an experimental determination of the nuclear quadrupole interaction using perturbed angular correlation of gamma-rays. The calculated EFG agrees well with the EFG derived from experiment. The total electric field gradient was decomposed into contributions from different orbitals and energy regions showing that both the Cd 5p and 4d wave functions contribute significantly. Finally, the influence of spin-orbit coupling on the electric field gradient was investigated and found to be of little importance.