The role of side-chain entropy (SCE) in protein folding has long been speculated about but is still not fully understood. Utilizing a newly developed Monte Carlo method, we conducted a systematic investigation of how the SCE relates to the size of the protein and how it differs among a proteins X-ray, NMR, and decoy structures. We estimated the SCE for a set of 675 nonhomologous proteins, and observed that there is a significant SCE for both exposed and buried residues for all these proteins-the contribution of buried residues approaches approximately 40% of the overall SCE. Furthermore, the SCE can be quite different for structures with similar compactness or even similar conformations. As a striking example, we found that proteins X-ray structures appear to pack more cleverly than their NMR or decoy counterparts in the sense of retaining higher SCE while achieving comparable compactness, which suggests that the SCE plays an important role in favouring native protein structures. By including a SCE term in a simple free energy function, we can significantly improve the discrimination of native protein structures from decoys.