The folding specificity of proteins can be simulated using simplified structural models and knowledge-based pairpotentials. However, when the same models are used to simulate systems that contain many proteins, large aggregates tend to form. In other words, these models cannot account for the fact that folded, globular proteins are soluble. Here we show that knowledge-based pair-potentials, which include explicitly calculated energy terms between the solvent and each amino acid, enable the simulation of proteins that are much less aggregation-prone in the folded state. Our analysis clarifies why including a solvent term improves the foldability. The aggregation for potentials without water is due to the unrealistically attractive interactions between polar residues, causing artificial clustering. When a water-based potential is used instead, polar residues prefer to interact with water; this leads to designed protein surfaces rich in polar residues and well-defined hydrophobic cores, as observed in real protein structures. We developed a simple knowledge-based method to calculate interactions between the solvent and amino acids. The method provides a starting point for modeling the folding and aggregation of soluble proteins. Analysis of our simple model suggests that inclusion of these solvent terms may also improve off-lattice potentials for protein simulation, design, and structure prediction. © 2011 by the Biophysical Society.