A new 4-point pharmacophore method for molecular similarity and diversity that rapidly calculates all potential pharmacophores/pharmacophoric shapes for a molecule or a protein site is described. The method, an extension to the ChemDiverse/Chem-X software (Oxford Molecular, Oxford, England), has also been customized to enable a new internally referenced measure of pharmacophore diversity. The "privileged" substructure concept for the design of high-affinity ligands is presented, and an example of this new method is described for the design of combinatorial libraries for 7-transmembrane G-protein-coupled receptor targets, where "privileged" substructures are used as special features to internally reference the pharmacophoric shapes. Up to 7 features and 15 distance ranges are considered, giving up to 350 million potential 4-point 3D pharmacophores/molecule. The resultant pharmacophore "key" ("fingerprint") serves as a powerful measure for diversity or similarity, calculable for both a ligand and a protein site, and provides a consistent frame of reference for comparing molecules, sets of molecules, and protein sites. Explicit "on-the-fly" conformational sampling is performed for a molecule to enable the calculation of all geometries accessible for all combinations of four features (i.e., 4-point pharmacophores) at any desired sampling resolution. For a protein site, complementary site points to groups displayed in the site are generated and all combinations of four site points are considered. In this paper we report (i) the details of our customized implementation of the method and its modification to systematically measure 4-point pharmacophores relative to a "special" substructure of interest present in the molecules under study; (ii) comparisons of 3- and 4-point pharmacophore methods, highlighting the much increased resolution of the 4-point method; (iii) applications of the 4-point potential pharmacophore descriptors as a new measure of molecular similarity and diversity and for the design of focused/biased combinatorial libraries.