Using the DFT + U methodology with a localized basis set, we studied the role of Lu 4f orbitals in the bonding of LuF3. We carried out scalar relativistic all-electron Douglas-Kroll-Hess DFT calculations of geometry, atomization energy, and vertical ionization potentials without and with the Hubbard term. The on-site repulsion parameter U-eff for Lu 4f orbitals was estimated from reference atomic data. With U-eff > 0, atomic localization of the valence 4f-like molecular orbitals is recovered, thus removing the spurious mixing of Lu 4f and F 2p orbitals present in standard Kohn-Sham calculations, while the molecular properties of LuF3 remained unchanged. (C) 2008 Elsevier B. V. All rights reserved.