We present a new method called the effective fragment molecular orbital (EFMO) method. The EFMO method is a hybrid between the fragment molecular orbital (FMO) electronic structure method (Kitaura, K., Ikeo, E.; Asada, T.; Nakano, T.; Uebayasi, M. Chem. Phys. Len 1999, 313, 701-706) and the effective fragment potential multipole-based polarizable force field (Day, P. N, Jensen, J H., Gordon, M. S., Webb, S. P; Stevens, W J.; Krauss, M Gartner, D.; Basch. H, Cohen, D. J Chem. Phys 1996, 105, 1968-1986). The EFMO method is based on the FMO molecular fragmentation scheme and the many-body energy expression but uses the EFP multipole-based energy expressions for long-range interactions and for evaluating the many-body polarization. The accuracy and performance of the EFMO method is compared to FMO and conventional electronic structure theory for water clusters The difference in the UM energy compared to that of conventional Hartree-Fock theory is roughly 0 5 kcal/mol per hydrogen using the 6-31G(d) basis set but less than 0.1 kcal/mol using the 6-31+G(d) basis set. The ETMO method is roughly two times faster than the FMO2 method using Hartree-Fock and five times when computing Hartree-Fock energy and gradients, preliminary density functional theory results are also presented