Several studies based on the known three-dimensional (3-D) structures of proteins show that two homologous proteins with insignificant sequence similarity could adopt a common fold and may perform same or similar biochemical functions. Hence, it is appropriate to use similarities in 3-D structure of proteins rather than the amino acid sequence similarities in modelling evolution of distantly related proteins. Here we present an assessment of using 3-D structures in modelling evolution of homologous proteins. Using a dataset of 108 protein domain families of known structures with at least 10 members per family we present a comparison of extent of structural and sequence dissimilarities among pairs of proteins which are inputs into the construction of phylogenetic trees. We find that correlation between the structure-based dissimilarity measures and the sequence-based dissimilarity measures is usually good if the sequence similarity among the homologues is about 30% or more. For protein families with low sequence similarity among the members, the correlation coefficient between the sequence-based and the structure-based dissimilarities are poor. In these cases the structure-based dendrogram clusters proteins with most similar biochemical functional properties better than the sequence-similarity based dendrogram. In multi-domain protein families and disulphide-rich protein families the correlation coefficient for the match of sequence-based and structure-based dissimilarity (SDM) measures can be poor though the sequence identity could be higher than 30%. Hence it is suggested that protein evolution is best modelled using 3-D structures if the sequence similarities (SSM) of the homologues are very low.