The influence of Li intercalation on the electronic structures of oxygen and vanadium ions in α-V205 was investigated using first-principles calculations based on the density functional theory with local density approximation. Two different intercalation sites for Li in the V205 lattices were considered. The calculation results demonstrate that intercalated Li ions at different sites show different effects on the electronic structures of O2p and V3d orbitals. But in both cases Li intercalation will weaken the V---O1 bonding and cause the split-off in V3d valence band to narrow or even disappear and simultaneously broaden the O2p conduction band. Further, the average electron transfer number from per intercalated Li2s to V3d orbitals is determined to total be about 0.52.