In this paper, we further develop the molecular fractionation with conjugate caps (MFCC) scheme for quantum mechanical computation of DNA-ligand interaction energy. We study three oligonuclear acid interaction systems: dinucleotide dCG/water, trinucleotide dCGT/water, and a Watson-Crick paired DNA segment, dCGT/dGCA. Using the basic MFCC approach, the nucleotide chains are cut at each phosphate group and a pair of conjugate caps (concaps) are inserted. Five cap molecules have been tested among which the dimethyl phosphate anion is proposed to be the standard concap for application. For each system, one-dimensional interaction potential curves are computed using the MFCC method and the calculated interaction energies are found to be in excellent agreement with corresponding results obtained from the full system ab initio calculations. The current study extends the application of the MFCC method to ab initio calculations for DNA or RNA-ligand interaction energies. (C) 2004 American Institute of Physics.