Dedicated to Professor Dieter Seebach on the occasion of his 65th birthday Many quantities that are standardly used to characterize a chemical system are related to free-energy differences between particular states of the system. By statistical mechanics, free-energy differences may be expressed in terms of averages over ensembles of atomic configurations for the molecular system of interest. Here, we review the most useful formulae to calculate free-energy differences from ensembles generated by molecular simulation, illustrate a number of recent developments, and highlight practical aspects of such calculations with examples selected from the literature.1. Introduction. ± The probability of finding a molecular system in one state or the other is determined by the difference in free energy between those two states. As a consequence, free-energy differences may be directly related to a wide range of fundamental chemical quantities such as binding constants, solubilities, partition coefficients, and adsorption coefficients. By means of statistical mechanics, free-energy differences may also be expressed in terms of averages over ensembles of atomic configurations for the molecular system of interest. Such an ensemble can be generated by Monte Carlo (MC) or molecular-dynamics (MD) simulation techniques. However, despite its inherent simplicity, the computation of free-energy differences from molecular simulations in practice remains far from trivial. But, as techniques evolve over time and novel applications of existing approaches appear, our ability to use molecular-simulation techniques to predict important chemical phenomena continues to grow steadily.The purpose of this paper is, therefore, twofold. First, we will introduce the mostuseful formulae to calculate free-energy differences from ensembles generated by molecular simulation, and, second, we will illustrate a number of recent developments, as well as highlight practical aspects of such calculations, using examples selected from published works. For more-thorough reviews on the methodology to calculate free energy via molecular simulation, we refer to the literature [1 ± 9]. In Sect. 2, the basic statistical mechanical description of the free energy of a system is given. In Sect. 3, a number of useful expressions for free-energy differences are reviewed. Sect. 4 contains a discussion of a number of important technical issues, including choices to be made and pitfalls to be avoided in practical free-energy calculations. These are illustrated by examples primarily from our own work over many years. In Sect. 5, some conclusions are drawn.