Density functional theory has been used to study the biologically important coenzyme NADPH and its oxidized form NADP+. It was found that free NADPH prefers a compact structure in gas phase and exists in more extended geometries in aqueous solution. Ultraviolet–visible absorption spectra in aqueous solution were calculated for NADPH with an explicit treatment of 100 surrounding water molecules in combination with the COSMO solvation model for bulk hydration effects. The obtained spectra using the B3LYP hybrid density functional agree quite well with experimental data. The changes of Gibbs free energies ΔG in reactions of NADPH with O2 observed experimentally in cardiovascular and in chemical systems, that is, NADPH + 2 3O2 → NADP+ + 2 O2− + H+ and NADPH + 1O2 + H+ → NADP+ + H2O2, respectively, were calculated. The NADPH oxidation reaction in the cardiovascular system cannot proceed without activation since the obtained ΔG is positive. The reaction of NADPH in the chemical system with singlet oxygen was found to proceed in two ways, each consisting of two steps, that is, NADPH firstly reacts with 1O2 barrierlessly to form NADP+ and HO2−, from which H2O2 is formed in a spontaneous reaction with H+, or 1O2 and H+ initially form 1HO2+, which further reacts with NADPH to yield NADP+ and H2O2. © 2019 The Authors. Journal of Computational Chemistry published by Wiley Periodicals, Inc.