We study how the electronic structure of the bilayer graphene ͑BLG͒ is changed by electric field and strain from ab initio density-functional calculations using the linear muffin-tin orbital and the linear augmented plane wave methods. Both hexagonal and Bernal stacked structures are considered. We only consider interplanar strain where only the interlayer spacing is changed. The BLG is a zero-gap semiconductor like the isolated layer of graphene. We find that while strain alone does not produce a gap in the BLG, an electric field does so in the Bernal structure but not in the hexagonal structure. The topology of the bands leads to Dirac circles with linear dispersion in the case of the hexagonally stacked BLG due to the interpenetration of the Dirac cones, while for the Bernal stacking, the dispersion is quadratic. The size of the Dirac circle increases with the applied electric field, leading to an interesting way of controlling the Fermi surface. The external electric field is screened due to polarization charges between the layers, leading to a reduced size of the band gap and the Dirac circle. The screening is substantial in both cases and diverges for the Bernal structure for small fields as has been noted by earlier authors. As a biproduct of this work, we present the tight-binding parameters for the free-standing single layer graphene as obtained by fitting to the density-functional bands, both with and without the slope constraint for the Dirac cone and keeping the hopping integral up to four near neighbors.