Dynamic protein-protein interactions are a key component of biological regulatory networks. Dimerization events--physical interactions between related proteins--represent an important subset of protein-protein interactions and are frequently employed in transducing signals from the cell surface to the nucleus. Importantly, dimerization between different members of a protein family can generate considerable functional diversity when different protein combinations have distinct regulatory properties. A survey of processes known to be controlled by dimerization illustrates the diverse physical and biological outcomes achieved through this regulatory mechanism. These include: facilitated proximity and orientation; differential regulation by heterodimerization; generation of temporal and spatial boundaries; enhancement of specificity; and regulated monomer-to-dimer transitions. Elucidation of these mechanisms has led to the design of new approaches to study and to manipulate signal transduction pathways.