Directed evolution, the laboratory process by which biological entities with desired traits are created through iterative rounds of genetic diversification and library screening or selection, has become one of the most useful and widespread tools in basic and applied biology. From its roots in classical strain engineering and adaptive evolution, modern directed evolution came of age twenty years ago with the demonstration of repeated rounds of PCR-driven random mutagenesis and activity screening to improve protein properties. Since then, numerous techniques have been developed that have enabled the evolution of virtually any protein, pathway, network or entire organism of interest. Here we recount some of the major milestones in the history of directed evolution, highlight the most promising recent developments in the field, and discuss the future challenges and opportunities that lie ahead.