The structure, the band structure, the total density of states, the dielectric function, the extinction coefficient and the refractive index have been calculated for lead zirconate (PbZrO3) using density functional theory (DFT). The full potential linearized augmented plane wave (FL‐LAPW) method was used with the generalized gradient approximation (GGA). Calculations of the optical spectra have been performed for the energy range 0–28 eV. It is shown that the orthorhombic PbZrO3, which is optically negative, exhibits a biaxial birefringence and its refractive index is smallest along the a‐axis (na (0) = 2.32, nb (0) = 2.36 and nc (0) = 2.34) which is close to the experimental value. (© 2008 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)