We have studied the structural, energetic, and electronic properties of crystalline cellulose I using first-principles density functional theory (DFT) with semiempirical dispersion corrections. The predicted crystal structures of both Iα and Iβ phases agree well with experiments and are greatly improved over those predicted by DFT within the local and semilocal density approximations. The cohesive energy is analyzed in terms of interchain and intersheet interactions, which are calculated to be of similar magnitude. Both hydrogen bonding and van der Waals (vdW) dispersion forces are found to be responsible for binding cellulose chains together. In particular, dispersion corrections prove to be indispensable in reproducing the equilibrium intersheet distance and binding strength; however, they do not improve the underestimated hydrogen bond length from DFT. The computed energy gaps of crystalline cellulose are 5.7 eV (Iα) and 5.4 eV (Iβ), whereas localized surface states appear within the gap for surfaces. The interaction of cellulose with water is studied by investigating the adsorption of a single water molecule on the hydrophobic Iβ(100) surface. The formation of hydrogen bond at the water/cellulose interface is shown to depend sensitively on the adsorption site for example above the equatorial hydroxyls or the CH moieties pointing out of the cellulose sheets. VdW dispersion interactions also contribute significantly to the adsorption energy