We present a detailed spectral analysis of the data obtained from NGC 3783 during the period 2000-2001 using Chandra. This analysis leads us to the following results. 1) NGC 3783 fluctuated in luminosity by a factor ~1.5 during individual observations (~170 ks duration). These fluctuations were not associated with significant spectral variations. 2) On a longer time scale (20-120 days), we found the source to exhibit two very different spectral shapes. The main difference between these can be well-described by the appearance and disappearance of a spectral component that dominates the underlying continuum at the longest wavelengths. The spectral variations are not related to the brightening or the fading of the continuum at short wavelengths in any simple way. 3) The appearance of the soft continuum component is consistent with being the only spectral variation, and there is no need to invoke changes in the opacity of the absorbers. 4) Photoionization modeling indicates that a combination of three ionized absorbers, each split into two kinematic components, can explain the strengths of almost all the absorption lines and bound-free edges. All three components are thermally stable and seem to have the same gas pressure. 5) The only real discrepancy between our model and the observations concerns the range of wavelengths absorbed by the iron M-shell UTA feature. This most likely arises as the result of our underestimation of the poorly-known dielectronic recombination rates appropriate for these ions. 6) The lower limit on the distance of the absorbing gas in NGC 3783 is between 0.2 and 3.2 pc. The assumption of pressure equilibrium imposes an upper limit of about 25 pc on the distance of the least-ionized component from the central source. (abridged)
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