We have performed an all-electron fully relativistic density functional calculation to study the magnetic properties of FeBr2. We show for the first time that the correlation effect enhances the contribution from orbital degrees of freedom of d electrons to the total magnetic moment on Fe 2+ as opposed to common notion of nearly total quenching of the orbital moment on Fe 2+ site. The insulating nature of the system is correctly predicted when the Hubbard parameter U is included. Energy bands around the gap are very narrow in width and originate from the localized Fe-3d orbitals, which indicates that FeBr2 is a typical example of the Mott insulator.PACS numbers: 74.25. Ha, 71.27.+a, FeX 2 (X= Cl, Br, I) are well known model systems for the study of antiferromagnetism. 1 They show unusual metamagnetic behavior wherein they undergo a phase transition from the antiferromagnetic to a saturated paramagnetic phase as a function of external magnetic field and temperature. FeBr 2 has a layered structure, where the ferromagnetic Fe layers are widely separated by non-magnetic halogen layers producing a quite weak interlayer antiferromagnetic interactions (T N = 14.2 K). The long range antiferromagnetic ordering can be overcome by applying an external magnetic field (∼ 30 kOe) parallel to the c-axis. 2 As a result, many theoretical 3 and experimental 4,5 works on FeBr 2 have been concentrated on probing the axial magnetic phase diagram, to predict and understand anomalies near the antiferromagnetic to the paramagnetic phase boundary.In addition, the electronic structures of transition metal dihalide system are of interest because they show various types of interesting behavior due to the strong correlation effect in the transition metal ion. 6 For example, they behave as a Mott insulator or charge transfer type insulator depending upon the relative size of charge transfer energy ∆ and the intra-orbital correlation energy U of the d-electrons.Although large amount of work is done to understand the anomalies in the phase diagram and the correlation effects, surprisingly no electronic structure is known from the first principles calculation. In this report, we study the electronic and magnetic properties of one of these systems (FeBr 2 ) by combining a first principles method and the Hubbard on-site correlation term.Orbital magnetic moment plays a crucial role in determining many important effects in magnetic materials such as magnetic crystalline anisotropy, non-collinear magnetism, magneto-optical Kerr effect etc.. 7 It is a well known fact that crystal field interaction quenches the orbital magnetic moment in systems containing 3d-transition metal. Accordingly, it is assumed that because of strong crystalline field on Fe 2+ ions from the surrounding Br − , the orbital moment will also get quenched in FeBr 2 . 8 Ropka, Michalski, and Radwanski 9 showed that the orbital moment is not quenched fully by the crystal field through their quasi-atomic calculation. Ropka et al. ascribed the origin of the large orbital moment to spi...