We present a density-functional theory based molecular dynamics study of the structural, dynamical, and electronic properties of liquid methanol under ambient conditions. The calculated radial distribution functions involving the oxygen and hydroxyl hydrogen show a pronounced hydrogen bonding and compare well with recent neutron diffraction data. We observe that, in line with infrared spectroscopic data, the hydroxyl-stretching mode is significantly redshifted in the liquid, whereas the hydroxyl bending mode shows a blueshift. A substantial enhancement of the molecular dipole moment is accompanied by significant fluctuations due to thermal motion. We compute a value of 32 for the relative permittivity, almost identical to the experimental value of 33. Our results provide valuable data for improvement of empirical potentials. (C) 2004 American Institute of Physics.