TiO2 doped with transition metals shows improved photocatalytic efficiency. Herein the electronic and optical properties of Mo-doped TiO2 with defects are investigated by DFT calculations. For both rutile and anatase phases of TiO2, the bandgap decreases continuously with increasing Mo doping level. The 4d electrons of Mo introduce localized states into the forbidden band of TiO2, and this shifts the absorption edge into the visible-light region and enhances the photocatalytic activity. Since defects are universally distributed in TiO2 or doped TiO2, the effect of oxygen deficiency due to oxygen vacancies or interstitial Mo atoms is systemically studied. Oxygen vacancies associated with the Mo dopant atoms or interstitial Mo will reduce the spin polarization and magnetic moment of Mo-doped TiO2. Moreover, oxygen deficiency has a negative impact on the improved photocatalytic activity of Mo-doped TiO2. The current results indicate that substitutional Mo, interstitial Mo, and oxygen vacancy have different impacts on the electronic/optical properties of TiO2 and are suited to different applications.