The density functional method was applied to the study of 1,1-diamino-2,2-dinitroethylene (Fox-7)/H2O dimer. All the possible dimers (1, 2 and 3), as well as the monomers, were fully optimized with the DFT method at the B3LYP/6-31 1++G** level. The basis set superposition errors (BSSE) are 4.62, 4.07 and 3.45 kJ/mol, and the zero point energy (ZPE) corrections for the interaction energies are 7.94, 5.66 and 6.40 kJ/mol for 1, 2 and 3, respectively. Dimer 1 is the most stable, judged by binding energy. After BSSE and ZPE corrections, the greatest corrected intermolecular interaction energy of dimer 1 was predicted to be -29.36 kJ/mol. The charge redistribution mainly occurs on the adjacent N-H center dot center dot center dot O atoms and N-O center dot center dot center dot H atoms between submolecules. The oxygen in the nitro group acts as a moderate hydrogen acceptor as compared to water oxygen. Based on the statistical thermodynamic method, the standard thermodynamic functions, heat capacities (C-p(0)), entropies (S-T(0)) and thermal corrections to enthalpy (H-T(0)), and the changes of thermodynamic properties on going from monomer to dimer over the temperature range 200.00-700.00 K were predicted. It is energetically or thermodynamically favorable for Fox-7 to bind with H2O and to form dimer 1 at room temperature.