Until recently, classical genetics and biochemistry were the main disciplines used to investigate how organisms develop, reproduce, behave and age. But, the availability of complete genome sequences for human and other organisms is changing the way we formulate and address biological questions. Functional genomics, a new biomolecular discipline, develops innovative experimental methods to address the question of how networks of genes in a certain organism carry out biological processes. With its powerful genetics, the budding yeast, Saccharomyces cerevisiae, has emerged as an important model organism in the development of many of the current functional genomics technologies. One such technology, the yeast two-hybrid system, is an experimental approach designed to identify protein interactions. In this review, I summarize the most important biological and biotechnological applications of the yeast two-hybrid system and variations thereof.