In order to assess the ability of theory to describe properly the dispersive interactions that are ubiquitous in peptide and protein systems, an isolated short peptide chain has been studied using both gas-phase laser spectroscopy and quantum chemistry. The experimentally observed coexistence of an extended form and a folded form in the supersonic expansion was found to result from comparable Gibbs free energies for the two species under the high-temperature conditions (< or = 320 K) resulting from the laser desorption technique used to vaporize the molecules. These data have been compared to results obtained using a series of quantum chemistry methods, including DFT, DFT-D, and post-Hartree-Fock methods, which give rise to a wide range of relative stabilities predicted for these two forms. The experimental observation was best reproduced by an empirically dispersion-corrected functional (B97-D) and a hybrid functional with a significant Hartree-Fock exchange term (M06-2X). In contrast, the popular post-Hartree-Fock method MP2, which is often used for benchmarking these systems, had to be discarded because of a very large basis-set superposition error. The applicability of the atomic counterpoise correction (ACP) is also discussed. This work also introduces the mandatory theoretical examination of experimental abundances. DeltaH(0 K) predictions are clearly not sufficient for discussion of folding, as the conformation inversion temperature is crucial to the conformation determination and requires taking into account thermodynamical corrections (DeltaG) in order to computationally isolate the most stable conformation.