Starting from a pair-excitation multiconfiguration self-consistent field approach considering pairwise excitations of two electrons of opposite spin from a single occupied molecular orbital to a single virtual molecular orbital, we present a natural orbital functional for the electronic energy containing the natural orbitals and the pair-excitation coefficients as variational parameters to be optimized. The occupation numbers of the natural orbitals can be determined from the pair-excitation coefficients in this implicit functional. Test calculations for the water molecule give occupation numbers of the natural orbitals in reasonable agreement with the results of full configuration interaction calculations. (C) 2003 American Institute of Physics.