Density Functional Theory (DFT) is a promising technique to study protein-ligand interactions from an atomistic-electronic point of view. It provides information on the electronic rearrangements upon ligand binding, the structure and the relative energy of the ligand in the binding pocket, among other properties. In addition, DFT-based techniques such as first-principles molecular dynamics (FPMD) (e.g., the Car-Parrinello [CP] method) are used to simulate the short-time dynamics of ligand-protein interactions. These techniques are emerging as a useful tool to decipher complex protein-ligand interactions in which chemical bonds are formed and/or broken during the binding process. In this chapter, the basis of DFT, its limitations, and current developments of the theory are discussed, focusing on its applications in the area of ligand-protein interactions. The performance of the method is illustrated with three examples in which the ligand binding process induces changes in the spin state or in the protonation state of the active species. The first two examples deal with the binding of oxygen to the active center of myoglobin, whereas the third one describes the binding of a formic acid inhibitor in the active center of catalase.