The B-Z conformational transition was induced by Mn2+ ions in a synthetic oligonucleotide (dG-dC)(20) and monitored by the vibrational circular dichroism (VCD). For the first time, the spectra were analyzed on the basis of quantum-mechanical computations. Force field and intensity tensors computed ab initio for smaller DNA fragments were transferred to a d(GCGCGCGC)(2) octamer model including explicit water molecules. The method allowed us to assign and explain most of the frequency and intensity features observed in the absorption and VCD spectra of the B- and Z-forms. Particularly, the computations reproduced the VCD sign flip caused by the transition due to the C=O stretching and allowed us to assign most spectral bands in the nitrogen bases vibrational region. Also, known isotopic effects (deuteration and a O-18 substitution) were reproduced correctly. For the sugar-phosphate modes, the assignment of the VCD bands was hindered by a weak experimental signal. The approach based on quantum-mechanical computations was found superior to previous models based on coupled oscillator theory. Water molecules hydrogen-bonded to the DNA skeleton had to be included for reliable interpretation of the VCD and IR spectral patterns, namely, for the sugar-phosphate vibrations.