Within the Born-Oppenheimer picture of the electronic Schrödinger equation the external potential due to the nuclei influences the resulting expectation values during the self consistent field procedure. In this thesis, the optimization and the benefit of atom centered potentials for an improved description and design of molecules is studied using density functional theory (DFT). It is shown that atom centered potentials can be used to increase the accuracy of the description of molecular properties as well as to generally explore chemical space rationally for structures which exhibit desired properties. The wide range of possible applications is illustrated by addressing several issues. First, an automated procedure is proposed for the design of optimal link pseudopotentials for quantum mechanics/molecular mechanics calculations. Secondly, it is shown how to tune variationally atom centered potentials within density functional perturbation theory in order to minimize the deviation in electron density from an arbitrary reference density. Here, a reference density has been chosen which results from the use of a different exchange-correlation potential. Thirdly, London dispersion interactions are mimicked with dispersion corrected atom centered potentials. Fourthly, the transferability of these dispersion corrected atom centered potentials is assessed. Fifthly, an expression for the molecular nuclear chemical potential is derived within the context of conceptual DFT. It offers the possibility to develop a general formulation for rational compound design via gradient based minimization of a property-penalty functional in chemical space.