Pure V(2)O(5) is a diamagnetic layered semiconductor with many applications such as catalysis. In this paper, we study oxygen vacancy-induced changes in the atomic and electronic structures as well as magnetic properties of V(2)O(5-x) within spin density functional theory with generalized gradient approximation. Both the supercell approach and virtual crystal approximation are used to simulate the oxygen-deficient V(2)O(5-x) with vacancy concentration x up to 0.5. The 1x2x2 supercell calculations with one O vacancy predict that the formation energies of the apical (O(1)), bridge (O(2)), and chain (O(3)) oxygen vacancies are, respectively, 2.48, 4.17, and 4.44 eV/vacancy, and hence that the O vacancies in V(2)O(5-x) would be predominantly of the O(1) type. The local structural distortions of the V atoms next to the O vacancies are found to be large for high vacancy density x(x>0.25), and for x approximately 0.5, even the crystal lattice changes from the orthorhombic to monoclinic symmetry. In all the cases considered, an O vacancy-induced stable or metastable ferromagnetic state with spin magnetic moment of approximately 2.0mu(B)/vacancy is found. For x below approximately 0.13 and 0.19