Molecular docking of small-molecules is an important procedure for computer-aided drug design. Modeling receptor side chain flexibility is often important or even crucial, as it allows the receptor to adopt new conformations as induced by ligand binding. However, the accurate and efficient incorporation of receptor side chain flexibility has proven to be a challenge due to the huge computational complexity required to adequately address this problem. Here we describe a new docking approach with a very fast, graph-based optimization algorithm for assignment of the near-optimal set of residue rotamers. We extensively validate our approach using the 40 DUD target benchmarks commonly used to assess virtual screening performance and demonstrate a large improvement using the developed side chain optimization over rigid receptor docking (average ROC AUC of 0.693 vs. 0.623). Compared to numerous benchmarks, the overall performance is better than nearly all other commonly used procedures. Furthermore, we provide a detailed analysis of the level of receptor flexibility observed in docking results for different classes of residues and elucidate potential avenues for further improvement. © 2013 Wiley Periodicals, Inc.