The electronic band structure of and the chemical bonding in CdPS3 have been studied by means of the self-consistent ab initio LMTO-ASA and the semiempirical tight-binding extended Huckel methods. The reluctance of the Cd atoms to occupy the center of the octahedral Sg sites and their tendency to be displaced along the crystallographic c direction result from a second-order Jahn-Teller effect involving the Cd 5p and possibly the 5s orbitals. The high-temperature monoclinic modification of the CdPS3 structure presents donor-acceptor interactions between the HOMO’s and LUMO’s of the P2S64- species in neighboring layers, which are absent in the low-temperature rhombohedral phase. The off-center shift of the Cd atoms in the low-temperature phase has no relationship to the change in stacking pattern associated with the phase transition.