Jiali Gao is supported by a grant from the Theoretical and Computational Chemistry Program to continue his development of a hybrid quantum mechanical and statistical mechanical technique to simulate chemical processes in solution and in heterogeneous catalysis. The objective of the research is to obtain reasonably quantitative agreement with experimental solvation energies. The approach provides new insights on the nature of intermolecular interactions, in particular, specific contributions from the polarization effects for processes of biochemical and materials interest in condensed phases. Applications involve the thermolysis of alpha-chloroethers and hydrolysis of model compounds for glycosyl derivatives in organic and aqueous solutions. Another major thrust of the research is the study of adsorption, binding, and chemical reactions associated with methanol-to-gasoline conversion using zeolite catalysis. Most chemical processes of commercial importance take place in solution. Computer simulations of chemical reactions in solution provide important molecular level insights into the factors that influence reaction rates. Many of the more interesting bond breaking reactions, however, exhibit quantum effects that cannot be modeled effectively using empirical potentials. Gao's approach involves the use of a combined simulation approach which uses Monte Carlo and molecular orbital theory to treat the quantum degrees of freedom undergoing change during the chemical reaction.