Highly accurate excitation spectra are predicted for the low-lying n-pi* and pi-pi* states of uracil for both the gas phase and in water employing the complete active space self-consistent field (CASSCF) and multiconfigurational quaside-generate perturbation theory (MCQDPT) methods. Implementation of the effective fragment potential (EFP) solvent method with CASSCF and MCQDPT enables the prediction of highly accurate solvated spectra, along with a direct interpretation of solvent shifts in terms of intermolecular interactions between solvent and solute. Solvent shifts of the n-pi* and pi-pi* ye excited states arise mainly from a change in the electrostatic interaction between solvent and solute upon photoexcitation. Polarization (induction) interactions contribute about 0.1 eV to the solvent-shifted excitation. The blue shift of the n-pi* state is found to be 0.43 eV and the red shift of the pi-pi* state is found to be -0.26 eV. Furthermore, the spectra show that in solution the pi-pi* state is 0.4 eV lower in energy than the n-pi* state.