Electronic states of PrCoO3 are studied using x-ray photoemission spectroscopy. ThePr 3d5/2 core level and valence band (VB) were recorded using anMg K α source. The core level spectrum shows that the3d5/2 level is split into two components of multiplicity four and two,respectively, due to coupling of the spin states of the hole in3d5/2 with the Pr 4f hole spin state. The observed splitting is 4.5 eV. The VB spectrumis interpreted using density of states (DOS) calculations under LDA andLDA +U. It is noted that LDA is not sufficient to explain the observed VBspectrum. Inclusion of on-site Coulomb correlation for Co 3d electrons inLDA +U calculations gives DOS which is useful in qualitative explanation of the ground state.However, it is necessary to include interactions between Pr 4f electrons to get betteragreement with the experimental VB spectrum. It is seen that the VB consistsof Pr 4f, Co 3d and O 2p states. Pr 4f, Co 3d and O 2p bands are highly mixed,indicating strong hybridization of these three states. The band near the Fermi levelhas about equal contributions from Pr 4f and O 2p states with somewhat smallercontribution from Co 3d states. Thus in the Zaanen, Sawatzky and Allen schemePrCoO3 can be considered as a charge transfer insulator. The charge transfer energyΔ can be obtained using LDA DOS calculations and the Coulomb-exchange energyU′ fromLDA +U. The explicitvalues for PrCoO3 are Δ = 3.9 eV and U′ = 5.5 eV; the crystal field splitting and 3d bandwidth of Co ions are also found to be 2.8 and 1.8 eV,respectively.