We report an ab initio〉/I〉 study of spectral properties of Ce^3+ doped at Na+ site of the NaF crys-tal, with the charge imbalance compensated by two oxygen substitutions for fluoride (OF') in the first coordination shell or two sodium vacancies (VNa') in the second coordination sphere. Density functional theory calculations within the supercell model are first performed to op-timize the local structures of the charge-compensated Ce^3+, based on which Ce-centered embedded clusters are constructed and wave function-based CASSCF/CASPT2/RASSI-SO calculations are carried out to obtain the energies of 4f1 and 5d1 levels. By comparing the calculated 4f→5d transition energies with experimental excitation spectra at low temper-atures, the lowest 4f→5d transition band peaked at 390 nm is assigned to the Ce^3+ with charge compensation by two coordinating OF' substitutions, rather than to the Ce^3+ with compensation by two VNa0 vacancies, as proposed earlier. The electronic reason for the large redshift (by -8000 cm-1) of the lowest 4f→5d transition as induced by the two nearby OF' substitutions is analyzed in terms of the changes in the centroid shift and crystal-field splitting.