AbstractHeavy fermion systems emerge from the collective Kondo effect, and their superconductivity can serve as a promising platform for realizing next-generation quantum technologies. However, it has been a great challenge to explore many-body effects in heavy fermion systems with ab-initio approaches. We computed the electronic structure of UTe₂ without purposive judgements, such as intentional selection of on-site Coulomb interaction and disregarding spin-orbit coupling. We show that U-5f electrons are highly localized in the paramagnetic normal state, giving rise to the Kondo effect. It is also found that the hybridization between U-5f and U-6d predominantly in the orthorhombic ab-plane is responsible for the high-temperature Kondo effect. In contrast, the hybridization between U-5f and Te-5p along the c-axis manifests the Kondo scattering at a much lower temperature, which could be responsible for the low-temperature upturn of the c-axis resistivity. Our results show that the electron correlation in UTe₂ is orbital selective, which naturally elucidates the recent experimental observations of anomalous temperature dependence of resistivity. Furthermore, we suggest that the Kondo effect is suppressed at high pressure owing to weak localization of magnetic moments, which results from enhanced U-5f electron hopping. Our discovery provides significant insight toward understanding anisotropic quantum behavior including selective re-entrant superconductivity in heavy fermion UTe₂.