Molecular dynamics simulations have been used to compute the difference in is replaced by Ala. They yield results (−3.42/−5.21 kcal/mol) that compared favorably with the experimental values (−3.3/−4.0 kcal/mol). The major contributions to the free energy difference arise from bonding terms involving degrees of freedom of the mutated sidechain, and from non‐bonded interactions of that sidechain with its environment in the folded protein. By comparison with simulations of an extended peptide in the absence of solvent, used as a reference state, it is shown that hydration effects play a minor role in the overall free energy balance of the Ile to Ala transformation.