A two-frequency shell model is proposed for investigating the structure of hypernuclei starting with a hyperon-nucleon potential in free space. In a calculation using the folded-diagram method for Λ¹⁶O, the Λ single particle energy is found to have a saturation minimum at an oscillator frequency ħωΛ≈10MeV, for the Λ orbit, which is considerably smaller than ħωN=14MeV for the nucleon orbit. The spin-dependence parameters derived from the Nijmegen NSC89 and NSC97f potentials are similar, but both are rather different from those obtained with the Jülich-B potential. The ΛNN three-body interactions induced by ΛN-ΣN transitions are important for the spin parameters, but relatively unimportant for the low-lying states of Λ¹⁶O.Yiharn Tzeng, S. Y. Tsay Tzeng, T. T. S. Kuo, T.-S.H. Lee, and V. G. D. Stok