A simple polarizable water model is developed and optimized for molecular dynamics simulations of the liquid phase under ambient conditions. The permanent charge distribution of the water molecule is represented by three point charges: two hydrogen sites and one additional M site positioned along the HOH bisector. Electronic induction is represented by introducing a classical charged Drude particle attached to the oxygen by a harmonic spring. The oxygen site carries an equal and opposite charge, and is the center of an intermolecular Lennard-Jones interaction. The HOH gas-phase experimental geometry is maintained rigidly and the dipole of the isolated molecule is 1.85 D, in accord with experiment. The model is simulated by considering the dynamics of an extended Lagrangian in which a small mass is attributed to the Drude particles. It is parametrized to reproduce the salient properties of liquid water under ambient conditions. The optimal model, refered to as SWM4-DP for "simple water model with four sites and Drude polarizability," yields a vaporization enthalpy of 10.52 kcal/mol, a molecular volume of 29.93 Angstrom(3), a static dielectric constant of 79+/-5, a self-diffusion constant of (2.30+/-0.04)x10(-5) cm(2)/s, and an air/water surface tension of 66.9+/-0.9 dyn/cm, all in excellent accord with experiments. The energy of the water dimer is -5.18 kcal/mol, in good accord with estimates from experiments and high level ab initio calculations. The polarizability of the optimal model is 1.04 Angstrom(3), which is smaller than the experimental value of 1.44 Angstrom(3) in the gas phase. It is likely that such a reduced molecular polarizability, which is essential to reproduce the properties of the liquid, arises from the energy cost of overlapping electronic clouds in the condensed phase due to Pauli's exclusion principle opposing induction. (C) 2003 American Institute of Physics.