FeI 2 is an insulating antiferromagnet with an unusual magnetic structure at ambient pressure. Recently, hyperfine field, electric field gradient, and other local quantities at the Fe site were measured over a wide range of pressures indicating a collapse of the orbital magnetic moment below the insulator-to-metal transition. In the present work we apply local density approximation ͑LDA͒ and LDAϩU approaches to calculate the electronic structure and to investigate the Fe on-site quantities. We propose that the vanishing of the orbital moment is connected to the change of orbital order as reflected in the symmetry of the occupied minority-spin orbital. We find good agreement between the calculated and measured hyperfine fields and quadrupolar shifts, and make predictions which can serve to validate the proposed mechanism of orbital moment collapse experimentally.