We study the modification of the electronic structure in the strong spin-orbit coupled Sr 2 IrO 4 by epitaxial strain using density-functional methods. Structural optimization shows that strain changes the internal structural parameters such as the Ir-O-Ir bond angle, which has an important effect on the band structure. An interesting prediction is the Γ−X crossover of the valence band maximum with strain, while the conduction minimum at M remains unchanged. This in turn suggests strong strain dependence of the transport properties for the hole-doped system, but not when the system is electron doped. Taking the measured value of the Γ−X separation for the unstrained case, we predict the Γ−X crossover of the valence band maximum to occur for the tensile epitaxial strain e xx ≈3%. A minimal tight-binding model within the J eff =1/2 subspace is developed to describe the main features of the band structure. The optical absorption spectra under epitaxial strain are computed using densityfunctional theory, which explains the observed anisotropy in the optical spectra with the polarization of the incident light. We show that the optical transitions between the Ir (d) states, which are dipole forbidden, can be explained in terms of the admixture of Ir (p) orbitals with the Ir (d) bands.