Structural, electronic and optical properties of ternary alloy system Cd x Zn 1−x S have been studied using first-principles approach based on density functional theory. Electronic structure, density of states and energy band gap values for Cd x Zn 1−x S are estimated in the range 0≤x≤1 using both the standard local density approximation (LDA) as well as the generalized gradient approximations (GGA) of Wu–Cohen (WC) for the exchange-correlation potential. It is observed that the direct band gap EgΓ−Γ of Cd x Zn 1−x S decreases nonlinearly with the compositional parameter x, as observed experimentally. It is also found that Cd s and d, S p and Zn d states play a major role in determining the electronic properties of this alloy system. Furthermore, results for complex dielectric constant ɛ(ω), refractive index n(ω), normal-incidence reflectivity R(ω), absorption coefficient α(ω) and optical conductivity σ(ω) are also described in a wide range of the incident photon energy and compared with the existing experimental data.