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A fast and reliable quantification of the binding thermodynamics of hydrophobic high-affinity ligands employing a new calorimetric competition experiment is described. Although isothermal titration calorimetry is the method of choice for a quantitative characterization of intermolecular interactions in solution, a reliable determination of a dissociation constant (K(D)) is typically limited to the range 100 μM > K(D) > 1 nM. Interactions displaying higher or lower K(D) values can be assessed indirectly, provided that a suitable competing ligand is available whose K(D) falls within the directly accessible affinity window. This established displacement assay, however, requires the high-affinity ligand to be soluble at high concentrations in aqueous buffer and, consequently, poses serious problems in the study of protein binding involving small-molecule ligands dissolved in organic solvents--a familiar case in many drug-discovery projects relying on compound libraries. The calorimetric competition assay introduced here overcomes this limitation, thus allowing for a detailed thermodynamic description of high-affinity receptor-ligand interactions involving poorly water-soluble compounds. Based on a single titration of receptor into a dilute mixture of the two competing ligands, this competition assay provides accurate and precise values for the dissociation constants and binding enthalpies of both high- and moderate-affinity ligands. We discuss the theoretical background underlying the approach, demonstrate its practical application to metal ion chelation and high-affinity protein-inhibitor interactions, and explore its potential and limitations with the aid of simulations and statistical analyses.