Geometric and electronic structures Of C-78 fullerenes encapsulating two Ti atoms and a C-2 molecule are studied by the first-principle total energy calculations. We find that the substantial hybridization between the 3d state of Ti atoms and the 2p state of C atoms results in the formation of weak covalent bonds between them and that the Ti atoms and the C-2 molecule form a zigzag chain inside the cage under the optimized geometry. Encapsulated C-2 molecule decreases the Coulomb repulsion energy between positively charged Ti atoms and rotates inside the cage. A plausible candidate for the structure of Ti2C2@C-78 extracted in a recent experiment is assigned by the density of states for the occupied electronic states. (c) 2007 Elsevier B.V. All rights reserved.