A comprehensive study of structural and dynamical properties of gamma-butyrolactone (GBL) and the extent to which they are affected in the vicinity of a lithium ion, both in gas and liquid phases, is reported. The isolated GBL molecule is found to be nonplanar, with a barrier of approximate to9 kJ/mol to ring inversion. As expected, the lithium ion coordinates the carbonyl oxygen with an almost collinear configuration relative to the carbon-oxygen bond but with a slight tilting toward the lactone oxygen. This configuration holds for clusters of up to four molecules and in the liquid phase as well (where a tetrahedral first solvation shell is found). A high level ab initio vibrational analysis, with a new assignment of bands has been performed, which shows substantial red and blue shifts upon lithium solvation, which decrease in a nontrivial way upon increasing the cluster size. To study the solvent effect of the vibrational spectrum, an accurate intramolecular force field has been developed, based on the concept of relaxed potential energy profiles. The inclusion of stretch and bend anharmonicity is shown to be essential in order to explain, not only the absolute value, but the sign of the shifts, particularly for the carbonyl stretching which is substantially downshifted. The shifts obtained for the rest of the bands, together with the diffusion coefficients for bulk GBL and for lithium, are in fair agreement with experimental results.