The molecular dipole moments and local environments of water in its liquid phase were examined for a series of first-principles Gibbs ensemble Monte Carlo simulations along the vapour–liquid coexistence curve using the Becke–Lee–Yang–Parr (BLYP) and Perdew–Burke–Ernzerhof (PBE) exchange/correlation density functionals. Molecular dipole moments were computed using maximally localized Wannier functions with the Berry phase scheme, while the structure was analysed with respect to tetrahedral order parameter and hydrogen bonding. Increasing the temperature results in a decrease of both the average molecular dipole  moment and the local structure, although the width of the dipole distribution remains fairly constant. A correlation is found between the extent of the local structure and the magnitude of the molecular dipole moment, but this correlation is limited to the first solvation shell.