The development and validation of a new knowledge based scoring function (SIScoreJE) to predict binding energy between proteins and ligands is presented. SIScoreJE efficiently predicts the binding energy between a small molecule and its protein receptor. Protein-ligand atomic contact information was derived from a Non-Redundant Data set (NRD) of over 3000 X-ray crystal structures of protein-ligand complexes. This information was classified for individual “”atom contact pairs”” (ACP) which is used to calculate the atomic contact preferences. In addition to the two schemes generated in this study we have assessed a number of other common atom-type classification schemes. The preferences were calculated using an information theoretic relationship of joint entropy. Among 18 different atom-type classification schemes “”ScoreJE Atom Type set2″” (SATs2) was found to be the most suitable for our approach. To test the sensitivity of the method to the inclusion of solvent, Single-body Solvation Potentials (SSP) were also derived from the atomic contacts between the protein atom types and water molecules modeled using AQUARIUS2. Validation was carried out using an evaluation data set of 100 protein-ligand complexes with known binding energies to test the ability of the scoring functions to reproduce known binding affinities. In summary, it was found that a combined SSP/ScoreJE (SIScoreJE) performed significantly better than ScoreJE alone, and SIScoreJE and ScoreJE performed better than GOLD::GoldScore, GOLD::ChemScore, and XScore.