A detailed theoretical quantum chemical study on 4b,9b-dihydroxy-7,8-dihydro-4bH-indeno[1,2b] benzofuran-9,10(6H,9bH)-dione (Dihydroxy-Dihydro-Indeno-Benzofuran-Dione) has been discussed. The structure of the title molecule has been optimized and the structural parameters have been calculated by DFT/B3LYP method with 6-311++G(d,p) basis set. The fundamental vibrational wavenumbers as well as their intensities were calculated and excellent agreement between observed and calculated wavenumbers has been achieved and was interpreted in terms of potential energy distribution analysis. The electronic properties such as HOMO and LUMO energies and associated frontier energy band gap were calculated. Thermodynamical parameters along with the nonlinear optical (NLO) behavior of the title molecule are also discussed. The lower value of frontier orbital energy gap and a higher value of dipole moment suggest that the title compound is highly reactive. The NLO behavior of the title compound has been achieved by dipole moment, polarizability and first static hyperpolarizability. The large value of hyperpolarizability β total , indicates that the title molecule may serve as a good NLO material. The theoretical results were found to be in coherence with the measured experimental data.