Using the ab initio density-functional generalized gradient approximation with varying on-site Coulomb interaction U, the electronic and crystal structures of Fe2SiO4 spinel were optimized at high pressure. It was found that the ground state changes from the metallic ferromagnetic state at U=0 into the antiferromagnetic state, stable in the regime of Mott insulating state for U>2 eV. We found that Fe2SiO4 spinel is an antiferromagnetic Mott insulator at the realistic value of U∼4.5 eV, with a distinct gap which opens in the minority-Fe(3d) states. We point out that the low value of the Néel temperature TN∼12 K follows from the geometrical frustration of magnetic interactions, while the exchange constant J∼1.7 meV estimated from the energies of ordered magnetic phases gives a rather high value of the Curie-Weiss temperature θCW≃340 K. The phonon-dispersion curves and phonon density of states were derived for both the metallic and insulating antiferromagnetic phase of Fe2SiO4 spinel, and significant changes of energy and dispersion of certain phonon modes, particularly with large Fe character, caused by local electron correlations were detected and analyzed. We point out some similarities with the electronic and dynamical properties of magnetite.