We present an ab initio molecular dynamics study of vibrational spectral diffusion and hydrogen bond dynamics in aqueous solution of acetone at room temperature. It is found that the frequencies of OD bonds in the acetone hydration shell have a higher stretch frequency than those in the bulk water. Also, on average, the frequencies of hydration shell OD modes are found to increase with increase in the acetone-water hydrogen bond distance. The vibrational spectral diffusion of the hydration shell water molecules reveals three time scales: A short-time relaxation (∼80 fs) corresponding to the dynamics of intact acetone-water hydrogen bonds, a slower relaxation (∼1.3 ps) corresponding to the lifetime of acetone-water hydrogen bonds and another longer time constant (∼12 ps) corresponding to the escape dynamics of water from the solute hydration shell. The present first principles results are compared with those of available experiments and classical simulations. © Indian Academy of Sciences.