We analyzed the atomic and electronic structures in relaxed Si 1− y C y crystals using the local density approximation (LDA) as implemented within the full-potential linearized augmented plane wave (FP-LAPW) basis. The band gaps are compared with those calculated with nonlocal corrections for the exchange-correlation energy functional and those calculated by using a GW approach. For small concentrations of carbon, it is found that carbon–silicon alloys are semiconducting with a very small band gap. These results are consistent with earlier LDA calculations, which predicted that the band gap of carbon–silicon alloy at low carbon concentrations is smaller than that of pure silicon. The optical band gap bowing is found to be strongly composition dependent. Furthermore, we found that the SiC alloys are characterized by a strong competition between structural (volume deformation) and chemical (charge transfer) effects leading to a giant optical gap bowing.