For decades, unicellular yeasts have been general models to help understand the eukaryotic cell and also our own biology. Recently, over a dozen yeast genomes have been sequenced, providing the basis to resolve several complex biological questions. Analysis of the novel sequence data has shown that the minimum number of genes from each species that need to be compared to produce a reliable phylogeny is about 20. Yeast has also become an attractive model to study speciation in eukaryotes, especially to understand molecular mechanisms behind the establishment of reproductive isolation. Comparison of closely related species helps in gene annotation and to answer how many genes there really are within the genomes. Analysis of non-coding regions among closely related species has provided an example of how to determine novel gene regulatory sequences, which were previously difficult to analyse because they are short and degenerate and occupy different positions. Comparative genomics helps to understand the origin of yeasts and points out crucial molecular events in yeast evolutionary history, such as whole-genome duplication and horizontal gene transfer(s). In addition, the accumulating sequence data provide the background to use more yeast species in model studies, to combat pathogens and for efficient manipulation of industrial strains.