The Molecular Mechanics/Poisson-Boltzmann Surface Area (MM/PBSA) and the Molecular Mechanics/Generalized Born Surface Area (MM/GBSA) methods calculate binding free energies for macromolecules by combining molecular mechanics calculations and continuum solvation models. To systematically evaluate the performance of these methods, we report here an extensive study of 59 ligands interacting with six different proteins. First, we explored the effects of the length of the molecular dynamics (MD) simulation, ranging from 400 to 4800 ps, and the solute dielectric constant (1, 2, or 4) on the binding free energies predicted by MM/PBSA. The following three important conclusions could be observed: (1) MD simulation length has an obvious impact on the predictions, and longer MD simulation is not always necessary to achieve better predictions. (2) The predictions are quite sensitive to the solute dielectric constant, and this parameter should be carefully determined according to the characteristics of the protein/ligand binding interface. (3) Conformational entropy often show large fluctuations in MD trajectories, and a large number of snapshots are necessary to achieve stable predictions. Next, we evaluated the accuracy of the binding free energies calculated by three Generalized Born (GB) models. We found that the GB model developed by Onufriev and Case was the most successful model in ranking the binding affinities of the studied inhibitors. Finally, we evaluated the performance of MM/GBSA and MM/PBSA in predicting binding free energies. Our results showed that MM/PBSA performed better in calculating absolute, but not necessarily relative, binding free energies than MM/GBSA. Considering its computational efficiency, MM/GBSA can serve as a powerful tool in drug design, where correct ranking of inhibitors is often emphasized.