Bismuth vanadate (BiVO4) is a promising candidate material for photocatalytic hydrogen generation and photocatalytic degradation of organics. In this paper, first-principle calculations are performed to investigate the effects of oxygen vacancy on the structural, elastic, electronic and optical properties of monoclinic BiVO4. It is illustrated that oxygen vacancy can exist in BiVO4 stably and might promote the transition of band gap from indirect to direct ones. Essentially, oxygen vacancy can enhance the hybridization of O2p, V3d and Bi6s orbitals, and shift the band edges. As a result, the dielectric function, refractive index, absorption coefficient, optical reflectivity, loss function and conductivity in the low energy range have a redshift. In addition, the real part of dielectric constant E > (1), refractive index n and reflectivity R of ideal BiVO4 increase with energy in the low energy range; however, they will decrease when oxygen vacancies are generated in BiVO4. But the other optical parameters are roughly independent of oxygen vacancies in the whole energy range.