The electronic structure of β-CuGaO2 was studied by first principles calculations and X-ray photoelectron spectroscopy (XPS), and the expected electrical and optical properties of this material were discussed. Density functional theory calculations using the local density approximation with corrections for on-site Coulomb interactions (LDA + U) with U = 5-7 eV reproduced well the experimentally obtained crystal structure and valence-band XPS spectrum. The calculated electronic structure indicates that β-CuGaO2 is a direct band gap semiconductor and its conduction band minimum and valence band maximum consist mainly of highly delocalized Ga 4s and Cu 4s states and relatively localized Cu 3d and O 2p states, respectively. The effective electron mass obtained under parabolic approximation is small (me∗/m0 = 0.21), similar to common n-type oxide semiconductors, and the effective hole mass is relatively large (mh∗/m0 = 1.7-5.1) although p-type conduction is experimentally observed. The direct and allowed band gap and large density of states near the valence band maximum result in a high absorption coefficient of 1 × 105cm-1 near the absorption edge.