beta-Lactoglobulin is the major whey protein in the milk of ruminants and some nonruminants, such as pigs and horses. Although beta-lactoglobulin was first isolated 60 yr ago, no function has been definitely ascribed to beta-lactoglobulin. Recent x-ray crystallographic studies have advanced knowledge of the structure of beta-lactoglobulin, which is homologous with that of retinol-binding protein and lipocalycins; the function of these proteins seems to be participation in the transport of small hydrophobic substances. By analogy, this protein has been suggested as having a role as a transporter of fatty acids and retinol. This review reassesses the function of beta-lactoglobulin in light of the large amount of information that has accrued in the last few years. In particular, this review concentrates upon studies of the binding of retinol and fatty acids to beta-lactoglobulin, including the binding constants and number of binding sites, the location of the binding sites, and the influence of chemical modifications in the interaction of the protein with both ligands. This study also describes studies of the influence of beta-lactoglobulin on several biological processes that may be relevant to the possible biological role of this protein.