Proteins fold to unique compact native structures. Perhaps other polymers could be designed to fold in similar ways. The chemical nature of the monomer "alphabet" determines the "energy matrix" of monomer interactions-which defines the folding code, the relationship between sequence and structure. We study two properties of energy matrices using two-dimensional lattice models: uniqueness, the number of sequences that fold to only one structure, and encodability, the number of folds that are unique lowest-energy structures of certain monomer sequences. For the simplest model folding code, involving binary sequences of H (hydrophobic) and P (polar) monomers, only a small fraction of sequences fold uniquely, and not all structures can be encoded. Adding strong repulsive interactions results in a folding code with more sequences folding uniquely a n d more designable folds. Some theories suggest that the quality of a folding code depends only on the number of letters in the monomer alphabet, but we find that the energy matrix itself can be at least as important as the size of the alphabet. Certain multi-letter codes, including some with 20 letters, may be less physical or protein-like than codes with smaller numbers of letters because they neglect correlations among inter-residue interactions, treat only maximally compact conformations, o r add arbitrary energies to the energy matrix. o 1996 Wiley-Liss, Inc.