Spin-1/2 chains with alternating antiferromagnetic and ferromagnetic couplings have attracted considerable interest due to the topological character of their spin excitations. Here, using density functional theory and density matrix renormalization group methods, we have systematically studied the dimerized chain system Na2Cu2TeO6. Near the Fermi level, the dominant states are mainly contributed by the Cu 3d x 2 −y 2 orbitals highly hybridized with the O 2p orbitals in the nonmagnetic phase, leading to an "effective" single-orbital low-energy model. Furthermore, the bandwidth of the Cu 3d x 2 −y 2 states is small (∼ 0.8 eV), suggesting that electronic correlations will strongly affect this system. By introducing such electronic correlations, we found this system is a Mott insulator. Moreover, by calculating the magnetic exchange interactions (J1, J2 and J3), we explained the size and sign of the exchange interactions in Na2Cu2TeO6, in agreement with neutron experiments. Based on the Wannier functions from first-principles calculations, we obtained the relevant hopping amplitudes and an "effective" d x 2 −y 2 Wannier function combining O 2p states with Cu states. A strong Cu-O-O-Cu super-super-exchange plays the main role for the largest antiferromagnetic exchange coupling, because of the direct overlap of the "effective" Wannier functions (combination of Cu 3d x 2 −y 2 and O 2p states) along the long-distanced Cu-Cu sites (J1 path). Moreover, the exchange interaction along the J2 path is FM because the Cu-O-Cu angle is closed to 90 • , where a pair of orthogonal O 2p orbitals with parallel spins are involved in the virtual electron hopping. In addition, we constructed a single-orbital Hubbard model for this dimerized chain system, where the quantum fluctuations are taken into account. Both AFM and FM coupling (↑-↓-↓-↑) along the chain were found in our DMRG and Lanczos calculations, in agreement with DFT and neutron results. We also calculated the hole pairing binding energy ∆E which becomes negative at Hubbard U ∼ 11 eV, indicating incipient pairing tendencies. Finally, we also looked at various cases of hole doping that always exhibit tight pairs. Thus, we believe our results for Na2Cu2TeO6 could provide guidance to experimentalists and theorists working on this dimerized chain system, such as short-range magnetic coupling, doping effects, and possible pairing tendencies.