A combined and sequential use of Monte Carlo simulations and quantum mechanical calculations is made to analyze the spectral shift of the lowest π–π* transition of phenol in water. The solute polarization is included using electrostatic embedded calculations at the MP2/aug-cc-pVDZ level giving a dipole moment of 2.25 D, corresponding to an increase of 76% compared to the calculated gas-phase value. Using statistically uncorrelated configurations sampled from the MC simulation, first-principle size-extensive calculations are performed to obtain the solvatochromic shift. Analysis is then made of the origin of the blue shift. Results both at the optimized geometry and in room-temperature liquid water show that hydrogen bonds of water with phenol promote a red shift when phenol is the proton-donor and a blue shift when phenol is the proton-acceptor. In the case of the optimized clusters the calculated shifts are in very good agreement with results obtained from mass-selected free jet expansion experiments. In the liquid case the contribution of the solute–solvent hydrogen bonds partially cancels and the total shift obtained is dominated by the contribution of the outer solvent water molecules. Our best result, including both inner and outer water molecules, is 570 ± 35 cm−1, in very good agreement with the small experimental shift of 460 cm−1 for the absorption maximum.