An algorithm is presented for the four-index transformation of electron repulsion integrals to a localized molecular orbital (MO) basis. Unlike in most programs, the first two indices are transformed in a single step. This and the localization of the orbitals allows the efficient neglect of small contributions at several points in the algorithm, leading to significant time savings. Thresholds are applied to the following quantities: distant orbital pairs, the virtual space before and after the orthogonalizing projection to the occupied space, and small contributions in the transformation. A series of calculations on medium-sized molecules has been used to determine appropriate thresholds that keep the truncation errors small (below 0.01\% of the correlation energy in most cases). Benchmarks for local second-order Moller-Plesset perturbation theory (MP2; i.e., MP2 with a localized MO basis in the occupied subspace) are presented for several large molecules with no symmetry, up to 975 contracted basis functions, and 60 atoms. These are among the largest MP2 calculations performed on a single processor. The computational time (with constant basis set) scales with a somewhat lower than cubic power of the molecular size, and the memory demand is moderate even for large molecules, making calculations that require a supercomputer for the traditional MP2 feasible on workstations.