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We describe a numerically efficient strategy for solving a linear system of equations arising in the Method of Moments for solving electromagnetic scattering problems. This novel approach, termed as the characteristic basis function method (CBFM), is based on utilizing characteristic basis functions (CBFs)-special functions defined on macro domains (blocks)-that include a relatively large number of conventional sub-domains discretized by using triangular or rectangular patches. Use of these basis functions leads to a significant reduction in the number of unknowns, and results in a substantial size reduction of the MoM matrix; this, in turn, enables us to handle the reduced matrix by using a direct solver, without the need to iterate. In addition, the paper shows that the CBFs can be generated by using a sparse representation of the impedance matrix-resulting in lower computational cost-and that, in contrast to the iterative techniques, multiple excitations can be handled with only a small overhead. Another important attribute of the CBFM is that it is readily parallelized. Numerical results that demonstrate the accuracy and time efficiency of the CBFM for several representative scattering problems are included in the paper.