The main objective of the research program is to solve the protein folding problem. Folding is a process in which a protein molecule is transformed from denatured state to its native conformation. The information needed to build the native three-dimensional structure of a small protein is encoded in the sequence of amino-acid residues. The folding problem is the unraveling of this code. This is one of the unsolved key problems in chemistry. Without the ability to predict the native structure of proteins a vast majority of information encoded in the human genome will remain virtually useless. To solve the folding problem it is crucial to determine the nature and energetics of the non-covalent interactions involved in the folding process. We found that the backbone electrostatic solvation free energy of an amino acid residue is the largest term in protein energetics. Although it is well known that the free energy needed to desolvate the peptide bond (CO-NH) is more than 10 kcal/mol, this term has been largely ignored. We developed the electrostatic screening model (ESM) of backbone conformational preferences. We have shown that the ESM is able to explain the unusual stability of poly-alanine helices and the thermodynamic beta-strand preferences of residues in the zinc-finger protein. The ESM predicts formation of beta-strands in unfolded proteins without forming any beta-sheet structure. Using NMR we have shown that such beta-strands exist in the urea-denatured ubiquitin. These beta-strands are more rigid than the rest of the molecule. We also demonstrated that the electrostatic screening is crucial in determining NMR chemical shifts. The ESM has been successful in predicting the three-dimensional structures of proteins in the blind ab-initio prediction experiments (CASP; see http://PredictionCenter.llnl.gov). Ligand-receptor interactions give important clues on the nature and energetics of the non-covalent interactions. NMR spectroscopy and molecular modeling has been utilized to study the interactions and bioactive conformations of new cyclic analogs of angiotensin II and non-peptide AT1 antagonists. These drugs are commonly used to treat hyper-tension. We also determined the bioactive conformations of small ligands of DNA girase fragment B using 'SAR by NMR' (structure-activity relationship by NMR) and molecular modeling. To study solvation and denaturation of proteins we developed new methods for the interpretation of infrared difference spectra and for the decomposition of a set of spectra. These methods have been used to study hydration of bovine serum albumin. We found that the alpha-helices are hydrated even at very small concentrations of water in the protein films. We have shown that the urea molecules generally do not disturb the structure of water. Thus, urea cannot be considered as a structure breaker.