Protein structure prediction remains an unsolved problem. Since prediction of the native structure seems very difficult, one usually tries to predict the correct fold of a protein. Here the "fold" is defined by the approximate backbone structure of the protein. However, physicochemical factors that determine the correct fold are not well understood. It has recently been reported that molecular mechanics energy functions combined with effective solvent terms can discriminate the native structures from misfolded ones. Using such a physicochemical energy function, we studied the factors necessary for discrimination of correct and incorrect folds. We first selected correct and incorrect folds by a conventional threading method. Then, all-atom models of those folds were constructed by simply minimizing the atomic overlaps. The constructed correct model representing the native fold has almost the same backbone structure as the native structure but differs in side-chain packing. Finally, the energy values of the constructed models were compared with that of the experimentally determined native structure. The correct model as well as the native structure showed lower energy than misfolded models. However, a large energy gap was found between the native structure and the correct model. By decomposing the energy values into their components, it was found that solvent effects such as the hydrophobic interaction or solvent shielding and the Born energy stabilized the correct model rather than the native structure. The large energetic stabilization of the native structure was attained by specific side-chain packing. The stabilization by solvent effects is small compared to that by side-chain packing. Therefore, it is suggested that in order to confidently predict the correct fold of a protein, it is also necessary to predict correct side-chain packing.