To gain new insight into the nature of aromaticity and conjugation, we have developed a novel procedure for constructing a localized fragment molecular orbital basis set. It is a three-step procedure: (i) obtainment of each subcanonical FMO (fragment molecular orbital) basis set from aspecific double bond fragment and its fragment molecule; (ii) the localization of the canonical FMOs; (iii) the superposition of all sublocalized FMO basis sets. On the basis of our procedure, Morokuma＇s energy partition provides, in the framework of ab initio SCF-MO computation at the STO-3G level,each of 46 compounds with various energy effects. The jc-energy difference in each of four fictitious electronic slates between the experimental and d(SH) geometries shows that the delocalized pi-system is practically destabilized. The ct-system always prefers a distorted geometry. The role of the pi-delocalization, stabilizing or destabilizing, depends on the response of the sigma-framework to the pi-delocalization. In the case of benzene-like and condensed-ring species, the vertical resonance energy (VRE) is always stabilizing. However, it is the sigma-framework, rather than the pi-system itself that is strongly stabilized by the VRE. The energy effect Delta E-p((pi)-pi) of the pi-delocalization on the pi-system of the fragment itself is generally destabilizing, and it is found to be a Boltzmann model function of the net pi charge transfer (CT) energy. The VRE of [N]annulene with 4N pi-electrons is more destabilizing than that of [N]annulene with 4N + 2 pi electrons is stabilizing. It appears to be a prerequisite to the ring current that the pi CT forms two closed circuits around the aromatic ring. In the case of benzene-like and condensed-ring compounds, the chemical shift is the Boltzmann model function of the net CT energy. As far as the VRE and chemical shift are concerned,the furan-like species appears not to be aromatic. However, the five-membered ring is the most rigid, and its hydrogen atom is a good leaving group, leading to high reactivity toward the substitution by an electrophilic reagent. The fact that 3H(2) is more stable than regular hexagonal H-6 and its explanation imply that the delocalized sigma-system is also destabilized.