In this study, the degradation mechanism of dielectric properties of hafnium dioxide thin films was investigated by using quantum chemical molecular dynamics. Effects of point defects such as oxygen vacancies and carbon interstitials and residual stress in the films on their local band gap were analyzed quantitatively. Drastic decrease of the local band gap from about 5.7 eV to about 1.0 eV was caused by the formation of a defect-induced site in the band gap. Though this defect-induced site was recovered by additional oxidation, the remaining interstitial oxygen deteriorated the quality of the interface with tungsten electrode by forming new oxide between them. The estimated changes of the band gap and the interface structure were confirmed by experiments using synchrotron-radiation photoemission spectroscopy.