Predicting protein tertiary structure by folding-like simulations is one of the most stringent tests of how much we understand the principle of protein folding. Currently, the most successful method for folding-based structure prediction is the fragment assembly (FA) method. Here, we address why the FA method is so successful and its lesson for the folding problem. To do so, using the FA method, we designed a structure prediction test of ''chimera proteins.'' In the chimera proteins, local structural preference is specific to the target sequences, whereas nonlocal interactions are only sequence-independent compaction forces. We find that these chimera proteins can find the native folds of the intact sequences with high probability indicating dominant roles of the local interactions. We further explore roles of local structural preference by exact calculation of the HP lattice model of proteins. From these results, we suggest principles of protein folding: For small proteins, compact structures that are fully compatible with local structural preference are few, one of which is the native fold. These local biases shape up the funnel-like energy landscape.computational protein design ͉ energy landscape ͉ fragment assembly ͉ Go model ͉ SIMFOLD N atural proteins have the algorithm of finding the global minimum of their free energy surface within a biologically relevant timescale (1). One of the most stringent tests of how much we understand the algorithm may be to predict protein tertiary structures by simulating processes that are analogous to folding, which is often called de novo structure prediction. Recently, significant progress has been made in de novo structure prediction, in which the most successful method is the fragment assembly (FA) method developed by Baker and coworkers (2) and others (3-6). The FA method shows considerable promise for new fold targets of recent Critical Assessments of Techniques for Protein Structure Prediction (CASPs), the community-wide blind tests of structure prediction (7-11). In the FA method, the protocol is separated into two stages: First, we collect structural candidates for every short segment of the target sequence, retrieving them from the structural database. The second stage is to assemble͞fold these fragments for constructing tertiary structures that have low energies.Simple questions arose as to why the FA method is so successful and what we can learn about protein folding from the success of the FA method. According to Baker and coworkers (12,13), the FA method is based on the experimental observation that local sequence of a protein biases but does not uniquely decide its local structure. To what extent does the modest local bias influence tertiary structures generated? How is the FA method related to recently developed protein folding theory (14, 15)? In this work, we address these questions.For this purpose, we need structure prediction software that uses the FA method. Here, we use the in-house-developed software, SIMFOLD. SIMFOLD employs a coarse-grained protei...