Transglutaminase 2 (TG2) is an inducible transamidating acyltransferase that catalyzes Ca(2+)-dependent protein modifications. It acts as a G protein in transmembrane signalling and as a cell surface adhesion mediator, this distinguishes it from other members of the transglutaminase family. The sequence motifs and domains revealed in the recent TG2 structure, can each be assigned distinct cellular functions, including the regulation of cytoskeleton, cell adhesion and cell death. Ablation of TG2 in mice results in impaired wound healing, autoimmunity and diabetes, reflecting the number and variety of TG2 functions. An important role for the enzyme in the pathogenesis of coeliac disease, fibrosis and neurodegenerative disorders has also been demonstrated, making TG2 an important therapeutic target.