We present an efficient algorithm for the structural alignment of medium-sized organic molecules. The algorithm has been developed for applications in 3D QSAR and in receptor modeling. The method assumes one of the molecules, the reference ligand, to be presented in the conformation that it adopts inside the receptor pocket. The second molecule, the test ligand, is considered to be flexible, and is assumed to be given in an arbitrary low-energy conformation. Ligand flexibility is modeled by decomposing the test ligand into molecular fragments, such that ring systems are completely contained in a single fragment. Conformations of fragments and torsional angles of single bonds are taken from a small finite set, which depends on the fragment and bond, respectively. The algorithm superimposes a distinguished base fragment of the test ligand onto a suitable region of the reference ligand and then attaches the remaining fragments of the test ligand in a step-by-step fashion. During this process, a scoring function is optimized that encompasses bonding terms and terms accounting for steric overlap as well as for similarity of chemical properties of both ligands. The algorithm has been implemented in the FLEXS system. To validate the quality of the produced results, we have selected a number of examples for which the mutual superposition of two ligands is experimentally given by the comparison of the binding geometries known from the crystal structures of their corresponding protein-ligand complexes. On more than two-thirds of the test examples the algorithm produces rms deviations of the predicted versus the observed conformation of the test ligand below 1.5 A. The run time of the algorithm on a single problem instance is a few minutes on a common-day workstation. The overall goal of this research is to drastically reduce run times, while limiting the inaccuracies of the model and the computation to a tolerable level.