A new charge model, called Charge Model 4 (CM4), and a new continuum solvent model, called Solvation Model 6 (SM6), are presented. Using a database of aqueous solvation free energies for 273 neutrals, 112 ions, and 31 ion-water clusters, parameter sets for the mPW0 hybrid density functional of Adamo and Barone (Adamo, C.; Barone, V. J. Chem. Phys. 1998, 108, 664-675) were optimized for use with the following four basis sets: MIDI!6D, 6-31G-(d), 6-31+G(d), and 6-31+G(d,p). SM6 separates the observable aqueous solvation free energy into two different components: one arising from long-range bulk electrostatic effects and a second from short-range interactions between the solute and solvent molecules in the first solvation shell. This partition of the observable solvation free energy allows SM6 to effectively model a wide range of solutes. For the 273 neutral solutes in the test set, SM6 achieves an average error of ̃0.50 kcal/mol in the aqueous solvation free energies. For solutes, especially ions, that have highly concentrated regions of charge density, adding an explicit water molecule to the calculation significantly improves the performance of SM6 for predicting solvation free energies. The performance of SM6 was tested against several other continuum models, including SM5.43R and several different implementations of the Polarizable Continuum Model (PCM). For both neutral and ionic solutes, SM6 outperforms all of the models against which it was tested. Also, SM6 is the only model (except for one with an average error 3.4 times larger) that improves when an explicit solvent molecule is added to solutes with concentrated charge densities. Thus, in SM6, unlike the other continuum models tested here, adding one or more explicit solvent molecules to the calculation is an effective strategy for improving the prediction of the aqueous solvation free energies of solutes with strong local solute-solvent interactions. This is important, because local solute-solvent interactions are not specifically accounted for by bulk electrostatics, but modeling these interactions correctly is important for predicting the aqueous solvation free energies of certain solutes. Finally, SM6 retains its accuracy when used in conjunction with the B3LYP and B3PW91 functionals, and in fact the solvation parameters obtained with a given basis set may be used with any good density functional or fraction of Hartree-Fock exchange.