Atomic charges in the water molecule and the water dimer have been calculated by two different schemes for partitioning the total charge distribution : Mulliken charges and atomic polar tenser-based charges. Large-scale calculations have been carried out where the basis set has been increased systematically toward the basis-set Limit. The Mulliken charges are highly sensitive to the choice of basis, and no convergence is observed. In contrast, atomic charges obtained from the trace of the atomic polar tensor exhibit rapid basis-set convergence. We have also investigated the effects of electron correlation on the atomic charges of the water molecule. Finally, the polarization and charge-transfer effects on the atomic charges have been calculated for the water dimer. The importance of such terms in a water potential used in molecular dynamics simulations of aqueous solutions is discussed.