A simple gradient correction to the local density approximation functional is proposed, which improves the structure of the exchange-correlation potential. The optimized generalized gradient approximation (GGA) functional provides uncoupled isotropic and anisotropic nuclear magnetic resonance shielding constants that are 2-3 times more accurate than those of commonly used GGAs, for a series of challenging molecules involving first- and second-row atoms; the results are competitive with those of ab initio wave function methods. A correlation is observed between the lowest occupied-virtual eigenvalue difference and the shielding accuracy. Magnetizabilities are also improved. The performance of the functional for structural and energetic predictions is investigated. These properties can be improved by relaxing the uniform electron gas condition, with no degradation in shielding quality. Atomization energies, ionization potentials, and molecular bond lengths are then comparable to those of other GGA functionals, although total energies are very poor. (C) 2003 American Institute of Physics.