The azido ligand is one of the most investigated ligands in magnetochemistry. Despite its importance, not much is known about the ligand field of the azido ligand and its influence on magnetic anisotropy. Here we present the electronic structure of a novel five-coordinate Co(II)azido complex (1), which has been characterized experimentally (magnetically and by electronic dd absorption spectroscopy) and theoretically (by means of multireference electronic structure methods). Static and dynamic magnetic data on 1 have been collected, and the latter demonstrate slow relaxation of the magnetization in an applied external magnetic field of H = 3000 Oe. The zero-field splitting parameters deduced from static susceptibility and magnetizations (D = -10.7 cm(-1), E/D = 0.22) are in excellent agreement with the value of D inferred from an Arrhenius plot of the magnetic relaxation time versus the temperature. Application of the so-called N-electron valence second-order perturbation theory (NEVPT2) resulted in excellent agreement between experimental and computed energies of low-lying dd transitions. Calculations were performed on 1 and a related four-coordinate Co(II)-azido complex lacking a fifth axial ligand (2). On the basis of these results and contrary to previous suggestions, the N-3 ligand is shown to behave as a strong s and p donor. Magnetostructural correlations show a strong increase in the negative D with increasing Lewis basicity (shortening of the Co-N bond distances) of the axial ligand on the N-3 site. The effect on the change in sign of D in going from four-coordinate Co(II) (positive D) to five-coordinate Co(II) (negative D) is discussed in the light of the bonding scheme derived from ligand field analysis of the ab initio results.