We have constructed theoretical spherical dust shell models using a full radiative transfer treatment, to investigate the effect of thermal emission on the strengths of molecular CO and H2O features in late type stars with circumstellar dust shells and to establish the optical depth at which the strengths of the bands are significantly affected. In this study, for the first time the central sources have been represented by realistic atmospheric models for cool stars in the temperature range 2500–3000 K, which are representative of the central stars of OH/IR sources. Parameters of the dust shell models were chosen to fit the observed run of colours from 1.25–5 μm of a large sample of OH/IR sources using ‘dirty silicate opacities’. The results show that the molecular band strengths in the 2 μm region are significantly affected by the dust emission only when the optical depth in the shell reaches a value of τ1μm ≈2 for T* = 2500 K and somewhat less for T* = 3000 K. However, the changes are such that the distinction between supergiant-like spectra, and variable M-star spectra is retained in models with very high shell optical depths. The implications of these models are discussed in relation to previous observations of OH/IR sources.