Six azo dyes have been synthesised using N-substituted phthalimides as diazo components. Substitution effects on dye hydrolysis and intermolecular interactions were investigated with density functional theory (DFT) at B3LYP/6-311G level. The results showed that the phthalimide moieties adopted a coplanar conformation in respect of the azo-coupled phenyl rings in all six dyes. N-Alkyl substitution had little influence on the absorption maxima. Bromo and cyano substitution on the phthalimide ring resulted in hypsochromic and bathochromic shifts of the absorption maxima respectively. Hydrolysis of the phthalimide ring was found to be largely influenced by steric effects rather than inductive effects of substituents. It was also found that p-stacking interactions of phthalimide/phenyl and phthalimide/phthalimide dimers were promoted by substituents. The results indicated that interactions are dominated by electrostatic and even more importantly dispersion forces. The computational results were also confirmed experimentally. Coloration Technology Society of Dyers and Colourists