This review highlights recent research on the properties and functions of the enzyme transketolase, which requires thiamin diphosphate and a divalent metal ion for its activity. The transketolase-catalysed reaction is part of the pentose phosphate pathway, where transketolase appears to control the non-oxidative branch of this pathway, although the overall flux of labelled substrates remains controversial. Yeast transketolase is one of several thiamin diphosphate dependent enzymes whose three-dimensional structures have been determined. Together with mutational analysis these structural data have led to detailed understanding of thiamin diphosphate catalysed reactions. In the homodimer transketolase the two catalytic sites, where dihydroxyethyl groups are transferred from ketose donors to aldose acceptors, are formed at the interface between the two subunits, where the thiazole and pyrimidine rings of thiamin diphosphate are bound. Transketolase is ubiquitous and more than 30 full-length sequences are known. The encoded protein sequences contain two motifs of high homology; one common to all thiamin diphosphate-dependent enzymes and the other a unique transketolase motif. All characterised transketolases have similar kinetic and physical properties, but the mammalian enzymes are more selective in substrate utilisation than the nonmammalian representatives. Since products of the transketolase-catalysed reaction serve as precursors for a number of synthetic compounds this enzyme has been exploited for industrial applications. Putative mutant forms of transketolase, once believed to predispose to disease, have not stood up to scrutiny. However, a modification of transketolase is a marker for Alzheimer's disease, and transketolase activity in erythrocytes is a measure of thiamin nutrition. The cornea contains a particularly high transketolase concentration, consistent with the proposal that pentose phosphate pathway activity has a role in the removal of light-generated radicals.