Abstract We report about self-consistent ab initio LMTO-ASA calculations of the electronic band structure and the crystal orbital Hamiltonian population function COHP. The calculations support a view of TlTe as an univalent Tl compound with two polyanionic partial structures, linear branched and unbranched chains, characterized by 3c–4e type of bonding, both within the chains and within the branches. The system deviates from classical Peierls-type systems with respect to the lack of energetic separation of the two types of transition-driving σ bands due to the appearance of nonintrachain bands close to E F. Tl coordination causes the lack of elastic degrees of freedom, which prevents the system from introducing completely alternating chains in one step. The branched Te2 chains are shown to be favored for pairing distortion compared to Te3 chains as a result of the weaker Tl–Te2 interactions. The distortion is interpreted as a dimerization of (Te 3) 3− units to form a new type of 42 electron (Te 6) 6− partial structure not known in polyhalogenide or noble gas halogenide chemistry.