We have performed first principles calculations of Li and Li+ adsorbed on the sidewall of carbon nanotubes. Density functional theory based on the B3LYP functional and all-electron basis set centered on atoms was employed. Carbon nanotubes were modeled by varying the diameter ranging from the chiral vector (6,0) to (12,0), and by varying the tubule length for the nanotubes having chiral vector (9,0) from 1 to 3 unit cells. Based on the study of potential energy surface, it was found that the Li atom and cation prefer to localize near the carbon nanotube sidewall and that surface diffusion of Li/Li+ can easily take place along the internal sidewall, while being hindered for the external sidewall. Binding energies tend to depend on the configuration, i.e., on being odd or even for the chiral vector (m, 0), rather than on the diameter size. In addition, they depend on the tubule length but converge rapidly after 3 unit cells. The atomic net charge (natural bond orbital and Mulliken population analysis) on the lithium inside carbon nanotube does not depend on whether the Li-CNT is neutral or charged. The results of this study may be helpful for understanding the fundamentals of how the Li-ion carbon nanotube battery works. (c) 2005 Elsevier B.V. All rights reserved.