Bismuth oxyiodide (BiOI) is an important photoelectric functional material that has a wide range of applications. In particular, it can be used as a photocatalyst that shows photocatalytic activity under visible-light irradiation. The synthesis procedure and related photocatalytic performance of BiOI have been reported. However, some of its fundamental properties still need to be further investigated. In this article, density functional theory calculations were performed to investigate the crystal structure, electronic properties, and optical properties of BiOI. Furthermore, the relationship between the intrinsic properties and the photocatalytic performance of BiOI was investigated. Based on the calculated results of the band structure, density of states, and projected wave function, the molecular-orbital bonding structure of BiOI is proposed. As a semiconductor photocatalyst, BiOI shows slight optical anisotropy in the visible-light region, indicating that it can efficiently absorb visible light if the morphology of BiOI is controlled. After comparing several computational methods, it was found that the generalized-gradient approximation corrected for on-site Coulomb interactions (GGA + U) is a suitable computational method for large sized BiOI models (e.g., impurity doping, the surface, and the interface) because it can significantly reduce the computational time while maintaining calculation accuracy. Thus, this article not only provides an in-depth understanding of the fundamental properties of BiOI as a potential efficient photocatalyst driven by visible light, but it also suggests a suitable computational method to investigate these properties.