The structure and binding energies of antimony selenide crystals encapsulated within single-walled carbon nanotubes are studied using density functional theory. Calculations were performed on the simulated Sb2Se3 structure encapsulated within single walled nanotube to investigate the perturbations on the Sb2Se3 crystal and tube structure and electronic structure and to estimate the binding energy. The calculated structures are in good agreement with the experimental high resolution transmission electron microscopy images of the Sb2Se3@SWNT. The calculated binding energy shows that larger diameter tube could accommodate the Sb2Se3 crystals exothermically. Minimal charge transfer is observed between nanotube and the Sb2Se3 crystals.