High spectral tunability and quantum yield are the striking features of rhodopsin photochemistry. They rely on a strong and complex interaction of their chromophore, the protonated Schiff base of retinal, with its protein environment. In this article, we review the progress in the computational modeling of these systems, focusing on the optical properties and the excited state dynamics. While the earlier success of atomistic theoretical models was based on the breakthrough in X-ray crystallography and combined quantum mechanical molecular mechanical (QM/MM) methodology, recent advances point out the importance of high-level QM methods and the incorporation of effects that are neglected in conventional QM/MM or ONIOM schemes, like polarization and charge transfer.