Density functional theory has been employed to determine ground state properties and calculate the complex dielectric function of the FeF 2 compound. The complex expression of magnetic permeability has been estimated using the formula of the magnetic permeability tensor. To interpret the optical transitions, densities of states and projected densities of states have been determined. Suitable expressions for treating contributions of electric permittivity and magnetic permeability to optical properties have been derived and applied. The absorption coefficient in the visible range is a result of the transitions from the top of the valence band to 4 s bands of Fe 2 + cations in the conduction band. In the far-infrared region, FeF 2 is a perfect reflector. The estimated optical properties show good agreement with previous theoretical and experimental results in the literature.