We derive an exact formula of orbital susceptibility expressed in terms of Bloch wave functions, starting from the exact one-line formula by Fukuyama in terms of Greens functions. The obtained formula contains four contributions: (1) Landau-Peierls susceptibility, (2) interband contribution, (3) Fermi surface contribution, and (4) contribution from occupied states. Except for the Landau-Peierls susceptibility, the other three contributions involve the crystal-momentum derivatives of Bloch wave functions. Physical meaning of each term is clarified. The present formula is simplified compared with those obtained previously by Hebborn et al. Based on the formula, it is seen first of all that diamagnetism from core electrons and Van Vleck susceptibility are the only contributions in the atomic limit. The band effects are then studied in terms of linear combination of atomic orbital treating overlap integrals between atomic orbitals as a perturbation and the itinerant feature of Bloch electrons in solids are clarified systematically for the first time.
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