The structures of gypsum at pressures up to approximately 4 GPa are studied with density functional theory (DFT) and thoroughly compared with single-crystal X-ray diffraction experiments reported in the literature [Comodi et al. in (Am Miner 93:1530–1537, 2008)]. It is found that the exchange–correlation density functional revPBE (revised Perdew–Burke–Ernzerhof) in conjunction with a nonlocal van der Waals (vdW) correction is capable of modeling the lattice constants, axial compressibility, and bulk modulus with good accuracy, suggesting that the inclusion of the vdW functional is crucially important for understanding the structure of hydrous minerals. To gain further physical insights, the geometric parameters associated with the constituting components of gypsum (water molecules, SO4 tetrahedra, and CaO8 polyhedra) are analyzed and compared with the experimental values. DFT simulations show that, under pressure, the polyhedral layers remain as nearly planar sheets of interconnecting SO4 tetrahedra and CaO8 polyhedra without further crinkling. DFT analysis on the layer compressibility along the major crystal axis reveals that, in contrast to experimental reports, the hydrous interlayer is less compressible than the polyhedral layer. Squeezed by the lateral pressure, the water molecules in the hydrous interlayer become better affixed along the major axis, making the interlayer harder to compress along this axis.