Geometry optimization and total energy computation of Ag1/4TiSe2 and TiSe2 have been completed by means of plane wave pseudopotential method based on the local density approximation to density functional theory. The calculated lattice parameters accords with the experimental results reported and the negative formation energy shows the stability of ordered Ag1/4TiSe2 system. The atomic populations，bond lengths，band structure and density of states indicate that：Ag atoms are bonded with stronger ionicity in Ag1/4TiSe2 than in TiSe2. The intercalation of Ag makes TiSe2 with semimetal property change into Ag1/4TiSe2 with metal property and the conductivity is remarkably improved.