One of the most challenging problems in protein structure prediction is improvement of homology models (structures within 1-3 Å C ␣ rmsd of the native structure), also known as the protein structure refinement problem. It has been shown that improvement could be achieved using in vacuo energy minimization with molecular mechanics and statistically derived continuously differentiable hybrid knowledge-based (KB) potential functions. Globular proteins, however, fold and function in aqueous solution in vivo and in vitro. In this work, we study the role of solvent in protein structure refinement. Molecular dynamics in explicit solvent and energy minimization in both explicit and implicit solvent were performed on a set of 75 native proteins to test the various energy potentials. A more stringent test for refinement was performed on 729 near-native decoys for each native protein. We use a powerfully convergent energy minimization method to show that implicit solvent (GBSA) provides greater improvement for some proteins than the KB potential: 24 of 75 proteins showing an average improvement of >20% in C ␣ rmsd from the native structure with GBSA, compared to just 7 proteins with KB. Molecular dynamics in explicit solvent moved the structures further away from their native conformation than the initial, unrefined decoys. Implicit solvent gives rise to a deep, smooth potential energy attractor basin that pulls toward the native structure.energy minimization ͉ implicit solvent ͉ knowledge-based ͉ molecular dynamics ͉ explicit solvent E xperimental determination of protein structures is very expensive, costing U.S. $250,000 in 2000 (1) and $66,000 today (2) and can be a notoriously difficult task, especially for membrane proteins. With the continuing exponential growth of genome sequence data, there is an increasing need for methods that accurately compute the high-resolution native structure of a protein, for use in biological applications that include virtual ligand screening (3), structure-based protein function prediction (4) and structure-based drug design (5). Homology or template based modeling has been the most successful method for protein structure prediction in the critical assessment of protein structure prediction (CASP) experiments (6, 7). The power of this technique progressively increases as ever more structures are solved by world-wide structural genomics initiatives (8, 9). Nevertheless, obtaining a model with the same accuracy as a crystal structure is still an unsolved problem: structure refinement of a rough model (within 1-3 Å rmsd) to bring it closer to the native structure remains a major challenge (6, 10). Work on structure refinement has been ongoing for many decades, starting from the first Molecular Mechanics (MM) energy minimization (11, 12) and continuing to a recent study with knowledgebased (KB) statistically derived potentials (13). During this period many different potentials and a variety of simulation methodologies such as energy minimization, molecular dynamics, and replica exchange Mon...