A volume integral equation method is presented for solving Schrödinger's equation for three-dimensional quantum structures. The method is applicable to problems with arbitrary geometry and potential distribution, with unknowns required only in the part of the computational domain for which the potential is different from the background. Two different Green's functions are investigated based on different choices of the background medium. It is demonstrated that one of these choices is particularly advantageous in that it significantly reduces the storage and computational complexity. Solving the volume integral equation directly involves O(N2) complexity. In this paper, the volume integral equation is solved efficiently via a multi-level fast multipole method (MLFMM) implementation, requiring O(N log N) memory and computational cost. We demonstrate the effectiveness of this method for rectangular and spherical quantum wells, and the quantum harmonic oscillator, and present preliminary results of interest for multi-atom quantum phenomena. © 2006 Elsevier Inc. All rights reserved.