An electronic structure-based polarization method, called the X-POL potential, has been described for the purpose of constructing an empirical force field for modeling polypeptides. The X-POL potential is a quantum mechanical model, in which the internal, bonded interactions are fully represented by an electronic structure theory augmented with some empirical torsional terms. Nonbonded interactions are modeled by an iterative, combined quantum mechanical and molecular mechanical method, in which the molecular mechanical partial charges are derived from the molecular wave functions of the individual fragments. In this paper, the feasibility of such and electronic structure based force field is illustrated by small model compounds. A method has been developed for separating a polypeptide chain into peptide units, and its parametrization procedure in the X-POL potential is documented and tested on glycine dipeptide. We envision that the next generation of force fields for biomolecular polymer simulations will be developed based on electronic structure theory, which can adequately define and treat many-body polarization and charge delocalization effects.