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We present a diabatization method of general applicability, based on the localization of molecular orbitals on user specified groups of atoms. The method yields orthogonal molecular orbitals similar to the canonical ones for the isolated atom groups, that are the basis to build reference spin‐adapted configurations representing localized or charge transfer excitations. An orthogonal transformation from the adiabatic to the quasi‐diabatic basis is defined by requiring maximum overlap with the diabatic references. We present the diabatization algorithm as implemented in the framework of semiempirical configuration interaction based on floating occupation molecular orbitals (FOMO−CI), but the same transformation can also be applied to ab initio wavefunctions, obtained for instance with state‐average CASSCF. The diabatic representation so obtained and the associated hamiltonian matrix are particularly suited to assess quantitatively the interactions that account for charge and energy transfer transitions, and to analyze the results of nonadiabatic dynamics simulations involving such phenomena. [ABSTRACT FROM AUTHOR]