The XΠg2, Σg+2, and Δg2 states of AgCl2 have been studied through benchmark ab initio complete active space self-consistent field plus second-order complete active space multireference Möller-Plesset algorithm (CASSCF+CASPT2) and complete active space self-consistent field plus averaged coupled pair functional (CASSCF+ACPF) and density-functional theory (DFT) calculations using especially developed basis sets to study the transition energies, geometries, vibrational frequencies, Mulliken charges, and spin densities. The spin-orbit (SO) effects were included through the effective Hamiltonian formalism using the ΛSΣ ACPF energies as diagonal elements. At the ACPF level, the ground state is Πg2 in contradiction with ligand-field theory, SCF, and large CASSCF; the adiabatic excitation energies for the Σg+2 and Δg2 states are 1640 and 18230cm−1, respectively. The inclusion of the SO effects leads to a pure Ω=3∕2(Πg2) ground state, a Ω=1∕2 (66%Πg2 and 34%Σg+2) A state, a Ω=1∕2 (34%Πg2 and 66%Σg+2) B state, a Ω=5∕2(Δg2)C state, and a Ω=3∕2(99%Δg2)D state. The X-A, X-B, X-C, and X-D transition energies are 485, 3715, 17 246, and 20110cm−1, respectively. The B97-2, B3LYP, and PBE0 functionals overestimate by ≈100% the XΠg2−Σg+2Te but provide a qualitative energetic ordering in good agreement with ACPF results. B3LYP with variable exchange leads to a 42% optimal Hartree-Fock exchange for transition energies but all equilibrium geometries get worsened. Asymptotic corrections to B3LYP do not provide improved values. The nature of the bonding in the XΠg2 state is very different from that of CuCl2 since the Mulliken charge on the metal is 1.1 while the spin density is only 0.35. DFT strongly delocalizes the spin density providing even smaller values of around 0.18 on Ag not only for the ground state, but also for the Σg+2 state.