Protein-protein interactions are essential to cellular mechanisms at all levels in biologically responsive systems. These interactions occur extracellularly and include ligand-receptor interactions, cell adhesion, antigen recognition, and virus-host recognition. Intracellular protein-protein interactions occur in the formation of multi-protein complexes, during the assembly of cytoskeletal elements, and between receptor-effector, as well as effector-effector, molecules of signal transduction pathways. Finally, assembly of transcriptional machinery involves protein interactions. The yeast two-hybrid method is a powerful technique for analyzing these protein-protein interactions. Since the publication of this technique in the late 1980s, the robust nature and far-reaching utility of yeast two-hybrid systems for functional expression library cloning has led to the identification of many novel proteins in all areas of biological life science research. Additionally, two-hybrid techniques provide a rapid and versatile system for the further characterization of discrete protein-protein interactions. Recent variations on the basic system have enabled application well beyond protein pairs, to investigate multi-protein complexes and protein-nucleotide interactions. Yeast two-hybrid methods necessitate expression and subsequent interaction between a "protein of interest" functional pair within the yeast cell, ultimately driving reporter gene expression and thus effectively linking protein-protein interaction(s) to a change in yeast cell phenotype. Functional protein-protein interactions using the two-hybrid techniques have been demonstrated for all levels of cellular biology; however, until recently, extracellular protein-protein interactions were excluded from investigations using this technique. Investigations from several labs have now demonstrated that extracellular proteins can be studied using two-hybrid methods, thereby enabling intense study of extracellular protein partners using the robust nature and the genetic power of yeast.