High-level DFT and ab-initio CASSCF/CASPT2 methodologies have been applied to study the ground and excited states of the retinal chromophore as a function of counterions of different complexities. On the basis of the recent 2.8 Angstrom X-ray structure of rhodopsin, the complete retinal chromophore was optimized in the presence of anionic Glu113, Thr94, and a water molecule (Wat2b), which together form a complex counterion of the protonated Schiff base. In addition, complexes were studied in which components of the counterion (Thr94 and/or Wat2b) were removed and also the free chromophore without any counterion, both in the protonated and deprotonated forms; for the CASSCF/CASPT2 calculations a reduced model chromophore with five conjugated double bonds was employed. In the presence of any counterion, bond alternation increases strongly in the region close to the Schiff base nitrogen, resulting in a structure similar to the protonated Schiff base. There is a conspicuous reduction in bond alternation in the three bonds from C9 to C12, which is already visible in the structure of the bare protonated chromophore. Comparison with other methods shows that bond alternation is exaggerated whenever noncorrelated theoretical methods are employed and may be exaggerated by the experimental methods as well. Bond alternation affects the excited-state energies only slightly. The large blue shift which the counterion exerts on the strongly allowed S-2 state of the chromophore is caused mainly by the charge of the counterion against which the electron density of the excited state is shifted. The effect of the counterion on the S state is small. This agrees with the calculated electric dipole moment of the chromophore upon excitation to S-1 and S-2 which changes strongly in magnitude and direction in the S-1 state but is hardly affected when the S-2 state is involved.