We review our work on bovine and human retinol-binding protein (RBP), bovine beta lactoglobulin (BLG), and bovine odorant-binding protein (OBP). These three proteins share a sequence similarity high enough to justify the proposal that their three-dimensional structure ought to be quite similar, and they also share the function of similar or even identical hydrophobic ligand binding, although with a very different degree of specificity. Thus they constitute an ideal system to exhaustively explore the question of three-dimensional structure prediction from sequence similarity and the related question of binding site prediction for similar ligands. We have used x-ray diffraction techniques on single crystals of human and bovine RBP, bovine milk BLG, and bovine nasal mucosa OBP to investigate this problem. The results of these crystallographic studies indicate that to the level of resolution so far attained, the three-dimensional structure of these three proteins is reasonably predicted from the sequence similarity. The fold is the same and structural differences are rather subtle. Finally, we present experimental evidence that the binding sites of RBP, BLG, and OBP are in different regions of the molecules. Thus, it appears that although sequence alignment has correctly predicted the protein fold, it has incorrectly predicted the hydrophobic ligand-binding sites.