A progress report is given of an extension of the density functional formalism to include long-range interactions such as van der Waals or dispersion forces. This is done by proving a general expression for the so-called exchange-correlation energy to contain and to describe such interactions just as well as any other treatment. The proper long-range forms of the interactions are derived explicitly in the cases of two neutral atoms, an atom outside a metal surface, and two parallel metal surfaces. The long-standing problem of treating the attractive and repulsive forces on the same footing in this way gets a solution. For practical calculations, an approximate form, based on an analysis in the weakly inhomogeneous limit and on a limiting form of the three-point function given by Rapcewicz and Ashcroft, is proposed and applied to some prototype cases. © 1995 John Wiley & Sons, Inc.