Folate coenzymes supply the activated one-carbon units required in nucleic acid biosynthesis, mitochondrial and chloroplast protein biosynthesis, amino acid metabolism, methyl group biogenesis, and vitamin metabolism. Because of its central role in purine and thymidylate biosynthesis, folate-mediated one-carbon metabolism has been the target of many anticancer drug therapies. This review is a summary of recent results that suggest that folate-mediated one-carbon metabolism is highly compartmentalized in eukaryotic cells. Evidence exists for compartmentation of folate coenzymes and their one-carbon units between intracellular organelles, for substrate channeling of folate coenzymes, and for compartmentation by intracellular folate-binding proteins. Metabolic, regulatory, and therapeutic implications of these processes are discussed.