A review is given of a recent theoretical approach to the electronic structure variations in solution via the truncated adiabatic basis-set (TAB) method. Compared to past efforts, novel aspects of the TAB approach include incorporation of both the linear and nonlinear electronic polarizabilities and account of electronic transitions to excited states. Its implementation with the self-consistent field method and application to study structure, dynamics and spectroscopy of liquid water via the Molecular Dynamics computer simulation technique are described. ©2000 American Institute of Physics.