We define Wannier functions for interacting systems, and show that the resu
lts on the localization of the Wannier functions for non-interacting system
s carry over to the Wannier functions for interacting systems. In addition
we demonstrate that the characterization of metals and insulators by the de
cay properties of their respective density matrices does not only apply to
non-interacting, but also to interacting systems. As a prototypical example
of a correlated system we investigate the one-dimensional Hubbard model. W
e propose an expression for the density matrix of that model, and derive a
relation between the decay constant of the density matrix and the gap. (C)
2001 Published by Elsevier Science Ltd.