The antigen-binding capacity of the paired variable domains of an antibody is well established. The observation that the isolated heavy chains of anti-hapten antibodies retain some antigen-binding capacity in the absence of light chains led to attempts to obtain an even smaller antigen-binding unit in a VH format. Unfortunately, the poor solubility, the reduced affinity for the antigen and the irreproducible outcome showed that additional protein engineering would be required to successfully generate single-domain antibody fragments. By serendipity, it was discovered that this engineering is already performed continuously in nature. Part of the humoral immune response of camels and llamas is based largely on heavy-chain antibodies where the light chain is totally absent. These unique antibody isotypes interact with the antigen by virtue of only one single variable domain, referred to as VHH. Despite the absence of the VH-VL combinatorial diversity, these heavy-chain antibodies exhibit a broad antigen-binding repertoire by enlarging their hypervariable regions. Methods are described to tap the VHH repertoire of an immunised dromedary or llama. These VHH libraries contain a high titre of intact antigen-specific binders that were matured in vivo. Synthetic libraries of a 'camelised' human VH, a mouse VH or a camelid VHH scaffold with a randomised CDR3 could constitute a valid alternative to immune libraries to retrieve useful single-domain antigen binders. The recombinant VHH that are selected from such libraries are well expressed, highly soluble in aqueous environments and very robust. Some in vivo matured VHH were also shown to be potent enzyme inhibitors, and the low complexity of the antigen-binding site is an asset in the design of peptide mimetics. Because of their smaller size and the above properties, the VHH clearly offer added-value over conventional antibody fragments. They are expected to open perspectives as enzyme inhibitors and intrabodies, as modular building units for multivalent or multifunctional constructs, or as immuno-adsorbents and detection units in biosensors.