Conserved hypothetical proteins, i.e. conserved proteins whose functions are still unknown, pose a challenge not just to functional genomics but also to general biology. For many conserved proteins, computational analysis provides only a general prediction of biochemical function; their exact biological functions have to be established through direct experimentation. In the few cases when this has been accomplished, the results were remarkable, revealing the deoxyxylulose, pathway and a new essential enzyme, the ITP pyrophosphatase. Comparative genome analysis is also instrumental in illuminating unsolved problems in biology, e.g. the mechanism of FtsZ-independent cell division, in Chlamydia, Ureaplasma and Aerapyrum or the role of uncharacterized conserved domains in, signal transduction. Copyright (C) 2001 John Wiley & Sons, Ltd.