Located between the inner and outer membranes of Gram-negative bacteria, periplasmic binding proteins (PBPs) scavenge or sense diverse nutrients in the environment by coupling to transporters or chemotaxis receptors in the inner membrane. Their three-dimensional structures have been deduced in atomic detail with the use of X-ray crystallography, both in the free and liganded state. PBPs consist of two large lobes that close around the bound ligand, resembling a Venus flytrap. This architecture is reiterated in transcriptional regulators, such as the lac repressors. In the process of evolution, genes encoding the PBPs have fused with genes for integral membrane proteins. Thus, diverse mammalian receptors contain extracellular ligand binding domains that are homologous to the PBPs; these include glutamate/glycine-gated ion channels such as the NMDA receptor, G protein-coupled receptors, including metabotropic glutamate, GABA-B, calcium sensing, and pheromone receptors, and atrial natriuretic peptide-guanylate cyclase receptors. Many of these receptors are promising drug targets. On the basis of homology to PBPs and a recently resolved crystal structure of the extracellular binding domain of a glutamate receptor ion channel, it is possible to construct three-dimensional models of their ligand binding domains. Together with the extensive information available on the mechanism of ligand binding to PBPs, such models can serve as a guide in drug discovery.