Protein side-chain mutation is fundamental both to natural evolutionary processes and to the engineering of protein therapeutics, which constitute an increasing fraction of important medications. Molecular simulation enables the prediction of the effects of mutation on properties such as binding affinity, secondary and tertiary structure, conformational dynamics, and thermal stability. A number of widely differing approaches have been applied to these predictions, including sequence-based algorithms, knowledge-based potential functions, and all-atom molecular mechanics calculations. Free energy perturbation theory, employing all-atom and explicit-solvent molecular dynamics simulations, is a rigorous physics-based approach for calculating thermodynamic effects of, for example, protein side-chain mutations. Over the past several years, we have initiated an investigation of the ability of our most recent free energy perturbation methodology to model the thermodynamics of protein mutation for two specific problems: protein–protein binding affinities and protein thermal stability. We highlight recent advances in the field and outline current and future challenges.