We have combined and compared three techniques for predicting functional interactions based on comparative genomics (methods based on conserved operons, protein fusions and correlated evolution) and optimized these methods to predict coregulated sets of genes in 24 complete genomes, including Saccharomyces cerevisiae, Caenorhabditis elegans and 22 prokaryotes. The method based on conserved operons was the most useful for this purpose. Upstream regions of the genes comprising these predicted regulons were then used to search for regulatory motifs in 22 prokaryotic genomes using the motif-discovery program AlignACE. Many significant upstream motifs, including five known Escherichia coli regulatory motifs, were identified in this manner. The presence of a significant regulatory motif was used to refine the members of the predicted regulons to generate a final set of predicted regulons that share significant regulatory elements.