Molecular mechanics force fields, which are commonly used in biomolecular modeling and computer-aided drug design, typically treat nonbonded interactions using a limited library of empirical parameters that are developed for small molecules. This approach does not account for polarization in larger molecules or proteins, and the parametrization process is labor-intensive. Using linear-scaling density functional theory and atoms-in-molecule electron density partitioning, environment-specific charges and Lennard-Jones parameters are derived directly from quantum mechanical calculations for use in biomolecular modeling of organic and biomolecular systems. The proposed methods significantly reduce the number of empirical parameters needed to construct molecular mechanics force fields, naturally include polarization effects in charge and Lennard-Jones parameters, and scale well to systems comprised of thousands of atoms, including proteins. The feasibility and benefits of this approach are demonstrated by computing free energies of hydration, properties of pure liquids, and the relative binding free energies of indole and benzofuran to the L99A mutant of T4 lysozyme.