The electronic structure of K2NiF4is calculated withabinitio, full potential and spin polarized pseudofunction energy band method. The bands are flat and have the indirect band gap of 0.7 eV between the occupied valence bands and empty conduction bands. The band gap is strongly influenced by the existence of [NiF6] crystal field and antiferromagnetic exchange interaction. Charge density plots show an anisotropic bonding between Ni and F in the basal plane and along the apical direction. Spin density plots exhibit an antiferromagnetic ordering with large localized moments on the Ni sites. However, a small fluctuation of net spin density is observed at the F sites. The computed optical conductivity is rather unremarkable with very small optically active structure. The salient features of our results are consistent with experimental observations.