We describe a general method whereby ab initio and semiempirical quantum mechanical techniques can be used in free energy perturbation simulations in which the number of electrons and atoms are being changed. This involves the introduction of a variable which allows the generation of fractional electrons during the course of a free energy perturbation simulation. Several applications of this new methodology using the semiempirical PM3 method are presented. These examples demonstrate that the technique can be successfully utilized to determine free energy differences in the gas phase. Finally, extension of the methodology to other quantum mechanical approaches and to condensed phases is discussed.