We present the theory and an implementation of the combined quantum mechanics/molecular mechanics/polarizable dielectric continuum (QM/MM/PCM) method. This is a fully polarizable layered model designed for effective inclusion of a medium in a quantum-mechanical calculation. The short-range part of the solvent electrostatic potential is described by an atomistic model while the long-range part of this potential is described by a dielectric continuum. The QM/MM/PCM method has been implemented in combination with QM linear response techniques. allowing for the assessment of, e.g., vertical electronic excitation energies and linear dipole dipole polarizabilities, in all cases using a nonequilibrium formulation of the environmental response. The model is general, but is here implemented for the case of density functional theory. Numerical examples are given for solvatochromic shifts relating to a set of organic molecules in aqueous solution. We find in general the QM/MM/PCM interface to exhibit a faster convergence with respect to the system size as compared to the use of QM/MM only.