We present the theory and an implementation of the combined quantum mechanics/molecular mechanics/polarizable dielectric continuum (QM/MM/PCM) method. This is a fully polarizable layered model designed for effective inclusion of a medium in a quantum-mechanical calculation. The short-range part of the solvent electrostatic potential is described by an atomistic model while the long-range part of this potential is described by a dielectric continuum. The QM/MM/PCM method has been implemented in combination with QM linear response techniques allowing for the assessment of, e.g., vertical electronic excitation energies and linear dipole-dipole polarizabilities, in all cases using a nonequilibrium formulation of the environmental response. The model is general, but is here implemented for the case of density functional theory. Numerical examples are given for solvatochromic shifts relating to a set of organic molecules in aqueous solution. We find in general the QM/MM/PCM interface to exhibit a faster convergence with respect to the system size as compared to the use of QM/MM only.