The Hartree-Fock density matrix is used to generate occupied and virtual molecular orbital, localized on a elected (active) region within a molecule. The orbitals are well suited for high level description of electron correlation in the active site. Orbitals outside the active site are not constructed explicitly, they provide a frozen core for the correlation calculation. Standard correlation methods are straightforward to apply and result local correlation energies. Transforming to locally canonical orbitals facilitates an iteration-free evaluation of local Moller-Plesset(MPn) energies. Selection of active orbitals does not produce dangling bonds since no chemical bonds are cut at the boundary. (c) 2007 Elsevier B.V. All rights reserved.