The incremental free energies of aqueous solution for acetyl(ala)(N)NH2 in its extended unfolded and alpha-helical conformations are compared using the SM5.2 solvation method of Cramer and Truhlar. A combination of density functional theory (DFT) at the B3LYP/D95(d,p) and AM1 has been employed using the ONIOM method. The incremental solvation energies of alpha-helical structures are very similar for both ONIOM and AM1 optimized structures as these structures do not significantly change upon solution. However, the conformations of the unfolded peptides change from extended beta-strand to polyproline II conformations upon aqueous solution. The incremental solvation free energy per residue of the polyproline II structure is about 2 kcal/mol/residue greater than that for the alpha-helix, representing an upper limit for the difference between the solvation energies. However, most of this difference disappears when the energy required to distort the optimized gas-phase extended beta-strand structure to the optimized polyproline II solution structure is included in the analysis, leaving an estimated difference in incremental solvation free energy of 0.3-0.5 kcal/mol favoring the unfolded structure. The solution structure sacrifices the stability derived from the intramolecular C-5 H-bonds for more favorable interactions with the aqueous solvent.