We present a joint theoretical and experimental investigation of the electronic and optical properties of vanadium pentoxide. Electron energy-loss spectroscopy in transmission was employed to measure the momentum-dependent loss function. This in turn was used to derive the optical conductivity, which is compared to the results of band-structure calculations. A good qualitative and quantitative agreement between the theoretical and the experimental optical conductivity was observed. The experimentally observed anisotropy of the optical properties of V 2 O 5 could be understood in the light of an analysis of the theoretical data involving the decomposition of the calculated optical conductivity into contributions from transitions into selected energy regions of the conduction band. In addition, based upon a tight binding fit to the band structure, values are given for the effective V 3 d xy− O 2 p hopping terms and are compared to the corresponding values for α′− NaV 2 O 5.