A key challenge of the post-genomic era is the identification of the function(s) of all the molecules in a given organism. Here, we review the status of sequence and structure-based approaches to protein function inference and ligand screening that can provide functional insights for a significant fraction of the approximately 50% of ORFs of unassigned function in an average proteome. We then describe FINDSITE, a recently developed algorithm for ligand binding site prediction, ligand screening and molecular function prediction, which is based on binding site conservation across evolutionary distant proteins identified by threading. Importantly, FINDSITE gives comparable results when high-resolution experimental structures as well as predicted protein models are used.