Density functional theory (DFT) computations were performed to investigate the electronic properties and Li storage capability of Ti3C2, one representative MXene (M represents transition metals, and X is either C or/and N) material, and its fluorinated and hydroxylated derivatives. The Ti3C2 monolayer acts as a magnetic metal, while its derived Ti3C2F2 and Ti3C2(OH)(2) in their stable conformations are semiconductors with small band gaps. Li adsorption forms a strong Coulomb interaction with Ti3C2-based hosts but well preserves its structural integrity. The bare Ti3C2 monolayer exhibits a low barrier for Li diffusion and high Li storage capacity (up to Ti3C2Li2 stoichiometry). The surface functionalization of F and OH blocks Li transport and decreases Li storage capacity, which should be avoided in experiments. The exceptional properties, including good electronic conductivity, fast Li diffusion, low operating voltage, and high theoretical Li storage capacity, make Ti3C2 MXene a promising anode material for Li ion batteries.