Abstract A new hybrid exchange–correlation functional named CAM-B3LYP is proposed. It combines the hybrid qualities of B3LYP and the long-range correction presented by Tawada et al. [J. Chem. Phys., in press]. We demonstrate that CAM-B3LYP yields atomization energies of similar quality to those from B3LYP, while also performing well for charge transfer excitations in a dipeptide model, which B3LYP underestimates enormously. The CAM-B3LYP functional comprises of 0.19 Hartree–Fock (HF) plus 0.81 Becke 1988 (B88) exchange interaction at short-range, and 0.65 HF plus 0.35 B88 at long-range. The intermediate region is smoothly described through the standard error function with parameter 0.33.