Density functional theory based molecular dynamics simulations are used to study the structure, infrared (IR) spectroscopy, circular dichroism (CD) spectroscopy, and coupling between the amide I vibrations of a bridged cyclic diamide in the gas phase and in aqueous solution. IR spectra computed via the dipole moment time correlation function show a large red-shift of 30 cm(-1) in the amide I vibration in solution compared to the gas phase, and are in good agreement with experiment. Conformationally averaged CD spectra computed using the CIS(D) method are highly sensitive to the structures used, and structures sampled in the aqueous phase simulation are required to obtain qualitatively correct CD spectra. Analysis of the coupling between the amide I modes shows that in the aqueous phase there is an increased localization of the vibrations on the individual peptide groups and a reduction in the mode coupling parameter compared to the gas phase. Overall, the results illustrate the significance of incorporating molecular dynamics in the simulation of IR and CD spectra.