AbstractA new induced dipole polarization model based on interacting Gaussian charge densities is presented. In contrast to the original induced point dipole model, the Gaussian polarization model is capable of finite interactions at short distances. Aspects of convergence related to the Gaussian model will be explored. The Gaussian polarization model is compared with the damped Thole‐induced dipole model and the point dipole model. It will be shown that the Gaussian polarization model performs slightly better than the Thole model in terms of fitting to molecular polarizability tensors. An advantage of the model based on Gaussian charge distribution is that it can be easily generalized to other multipole moments and provide effective damping for both permanent electrostatic and polarization models. Finally, a method of parameterizing polarizabilities is presented. This method is based on probing a molecule with point charges and fitting polarizabilities to electrostatic potential. In contrast to the generic atom type polarizabilities fit to molecular polarizability tensors, probed polarizabilities are significantly more accurate in terms of reproducing molecular polarizability tensors and electrostatic potential, while retaining conformational transferability. © 2007 Wiley Periodicals, Inc. J Comput Chem, 2007