A generalized hybrid orbital (GHO) method has been developed at the semiempirical level in combined quantum mechanical and molecular mechanical (QM/MM) calculations. In this method, a set of hybrid orbitals is placed on the boundary atom between the QM and MM fragments, and one of the hybrid orbitals participates in the SCF calculation for the atoms in the QM region. The GHO method provides a well-defined potential energy surface for a hybrid QM/MM system and is a significant improvement over the "link-atom" approach by saturating the QM valencies with hydrogen atoms. The method has been tested on small molecules and yields reasonable structural, energetic, and electronic results in comparison with the results of the corresponding QM and MM approximations. The GHO method will greatly increase the applicability of combined QM/MM methods to systems comprising large molecules, such as proteins.