The 'anomeric effect' is the thermodynamic preference for polar substituents to occupy the axial position in the chair conformation of various heterocycles. The most common explanation given for this effect at present is hyperconjugation from the lone pairs on the ring heteroatom to the antibonding orbital between the anomeric carbon and its linking substituent. Alternatively, the anomeric effect could be explained by intramolecular electrostatic interactions between local dipoles. Few models can provide convincing data for either theory at the quantum-mechanical level. Now, using the extended block-localized wavefunction method, which is the simplest form of valence bond theory, we have evaluated the degree of hyperconjugation in various compounds that display the anomeric effect and have interpreted their conformational preferences in terms of steric, hyperconjugation and dispersion effects. The results provide strong evidence that hyperconjugative interactions are not responsible for the anomeric effect and that it is better interpreted in terms of electrostatic interactions.