We have attempted to predict the three-dimensional structures of 19 proteins for the CASP3 experiment, each showing less than 25% sequence identity with known structures. Predictions were based on a threading method that aligns the target sequence with the conserved cores of structural templates, as identified from structure–structure alignments of the template with homologous neighbors. Alternative alignments were scored using contact potentials and a position-specific score matrix derived from sequence neighbors of the template. We find that this method identified the correct structural family for 11 of the 19 targets and predicted the remaining 8 targets to be similar to “none” of the templates, avoiding false positives. Threading alignments are relatively accurate for 10 of the 11 targets, including alignments for 6 of 7 identified at CASP3 as fold-recognition targets. These predictions were ranked “first place” by the CASP3 assessor when compared to fold-recognition predictions made by other methods. It appears that threading with family-specific models for structure and sequence conservation has improved threading prediction accuracy. Proteins Suppl 1999;3:133–140. Published 1999 Wiley-Liss, Inc.