Water-mediated hydrogen bonds play critical roles at protein–protein and protein–nucleic acid interfaces, and the interactions formed by discrete water molecules cannot be captured using continuum solvent models. We describe a simple model for the energetics of water-mediated hydrogen bonds, and show that, together with knowledge of the positions of buried water molecules observed in X-ray crystal structures, the model improves the prediction of free-energy changes upon mutation at protein–protein interfaces, and the recovery of native amino acid sequences in protein interface design calculations. We then describe a “solvated rotamer” approach to efficiently predict the positions of water molecules, at protein–protein interfaces and in monomeric proteins, that is compatible with widely used rotamer-based side-chain packing and protein design algorithms. Finally, we examine the extent to which the predicted water molecules can be used to improve prediction of amino acid identities and protein–protein interface stability, and discuss avenues for overcoming current limitations of the approach. Proteins 2005. © 2005 Wiley-Liss, Inc.