We present a detailed first principle investigation on CdAl 2 Se 4 both at ambient and the high pressure conditions. At ambient condition CdAl 2 Se 4 exists in body centered tetragonal (BCT) phase and at high pressure in spinel phase. Corresponding to different volume the total energy has been optimized using three functional, viz., the local density approximation (LDA), the generalized gradient approximation (GGA) and the Engel-Vosko generalised gradient approximation (EV-GGA). In all the cases phase transition from the BCT to the spinel phase has been observed. The equilibrium lattice constants, energy band gaps, bulk modulus have been reported at ambient conditions in both the phases. According to our prediction CdAl 2 Se 4 is a direct band gap material in both the studied phases, contrary to the earlier results reported by Funetes-cabrea and Sankey for spinel phase. Among optical constants index of refraction, absorption coefficient and optical conductivity are calculated and compared with the existing results in both the phases within the energy range of 0–25eV.