We have presented a method for modeling polarization in hybrid QM/MM calculations. The method, which expresses the induced dipoles as a set of "induced" charges, is based on the induced dipole approach and methodology for calculating potential-derived point charges from distributed multipole series. The method has the advantage that the same methodology can be used to determine the induced charges and the potential derived charges and so both sets of charges are rigorously defined within the same framework. This underlying link with the wave function makes the method particularly suitable for use in hybrid QM/MM calculations. Here we assess the importance of explicit polarization in the classical part of a QM/ MM system with regard to improving the classical description and the consequent effects on the quantum description. The main advantages of the induced charge approach are that the method is readily interfaced with quantum mechanical methods and that induced charges are more readily interpreted than induced dipoles. The ease of interpretation is illustrated by analysis of the charges involved in dimeric and trimeric hydrogen bonded systems. The method for treating the MM polarization has been validated by a regression analysis of the charges induced in both the QM and MM systems against those derived from full quantum mechanical calculations. The method has also been validated using two energy decomposition approaches, which show that MM polarization makes a significant and reliable contribution to the QM - MM interaction energy in a hybrid system. The distance dependency of the induced charges is investigated in calculations on methylsuccinyl-Ala-Ala-Pro-Ala chlormethyl ketone interacting with human neutrophil elastase and propranolol interacting with asparagine residues in a model of the beta(2)-adrenergic receptor.