The recently developed lambda-dynamics free-energy based simulation method was used to study the binding of 10 five-member ring heterocycle derivatives to an artificial cavity created by mutagenesis inside cytochrome c peroxidase. Application of lambda-dynamics to this system gives a reasonable estimate of the binding affinity of the ligands. This methodology also provides a means to explore the binding orientations and conformations of the ligands inside the binding pocket much better than does conventional MD. This is due to the scaling of forces inherent in the it-dynamics method, which lowers the barriers separating different binding modes and conformations. Examination of the lambda-dynamics trajectory of the ligands revealed alternative binding orientations and conformations not detected by crystallography. Furthermore, a lambda-dynamics simulation starting from random initial orientations, in which some li,ligands take significantly different orientations as compared with those from the X-ray structure, successfully samples the X-ray crystallographic orientations in all ligands. Ligand sampling by conventional MD starting from same initial structures remains trapped in the local minima from which they start. Such efficient sampling of ligand orientations and conformations is expected to diminish the limitation that an initial ligand structure must be close to its true bound orientation in order to yield a reasonable estimate of the binding free energy.