Rechargeable lithium batteries have achieved a rapid advancement and commercialization in the past decade owing to their high capacity and high power density. Different functional materials have been put forward progressively, and each possesses distinguishing structural features and electrochemical properties. In virtue of density functional theory (DFT) calculations, we can start from a specific structure to get a deep comprehension and accurate prediction of material properties and reaction mechanisms. In this paper, we review the main progresses obtained by DFT calculations in the electrode materials of rechargeable lithium batteries, aiming at a better understanding of the common electrode materials and gaining insights into the battery performance. The applications of DFT calculations involve in the following points of crystal structure modeling and stability investigations of delithiated and lithiated phases, average lithium intercalation voltage, prediction of charge distributions and band structures, and kinetic studies of lithium ion diffusion processes, which can provide atomic understanding of the capacity, reaction mechanism, rate capacity, and cycling ability. The results obtained from DFT are valuable to reveal the relationship between the structure and the properties, promoting the design of new electrode materials.