A new polarizable and flexible water potential has been developed based on the multistate empirical valence bond (MS-EVB) method. The model adds a charge-determination step to the simple point charge/flexible (SPC/F) potential. Two models have been developed: one that is polarizable only along the principal axis, and another that is polarizable in both directions within the molecular plane. The two models give nearly identical radial distribution functions (RDF) for the three site-site RDFs in water: oxygen-oxygen, oxygen-hydrogen, and hydrogen-hydrogen. The new model exhibits a liquid structure that is more ordered than SPC/F but is still well matched to experiment. The gas-phase monomer and dimer properties of the polarizable models are much closer to the experimental result than is SPC/F. Experimental condensed phase properties, such as the bond angle, bond length, molecular dipole moment, and total energy, are also reasonably well reproduced. The static dielectric constant and self-diffusion constant of the model with two directions of polarizability are also reasonably accurate. The MS-EVB method is shown to provide a simple approach to including both polarizability and bond flexibility into a water potential.