AbstractAn extended system Hamiltonian is proposed to perform molecular dynamics (MD) simulation in the grand canonical ensemble. The Hamiltonian is similar to the one proposed by Lynch and Pettitt (Lynch and Pettitt, J Chem Phys 1997, 107, 8594), which consists of the kinetic and potential energies for real and fractional particles as well as the kinetic and potential energy terms for material and heat reservoirs interacting with the system. We perform a nonlinear scaling of the potential energy parameters of the fractional particle, as well as its mass to vary the number of particles dynamically. On the basis of the equations of motion derived from this Hamiltonian, an algorithm has been proposed for MD simulation at constant chemical potential. The algorithm has been tested for the ideal gas, for the Lennard–Jones fluid over a wide range of temperatures and densities, and for water. The results for the low‐density Lennard–Jones fluid are compared with the predictions from a truncated virial equation of state. In the case of the dense Lennard–Jones fluid and water our predicted results are compared with the results reported using other available methods for the calculation of the chemical potential. The method is also applied to the case of vapor‐liquid coexistence point predictions. © 2007 Wiley Periodicals, Inc. J Comput Chem, 2007