X-ray or NMR structures of proteins are often derived without their ligands, and even when the structure of a full complex is available, the area of contact that is functionally and energetically significant may be a specialized subset of the geometric interface deduced from the spatial proximity between ligands. Thus, even after a structure is solved, it remains a major theoretical and experimental goal to localize protein functional interfaces and understand the role of their constituent residues. The evolutionary trace method is a systematic, transparent and novel predictive technique that identifies active sites and functional interfaces in proteins with known structure. It is based on the extraction of functionally important residues from sequence conservation patterns in homologous proteins, and on their mapping onto the protein surface to generate clusters identifying functional interfaces. The SH2 and SH3 modular signaling domains and the DNA binding domain of the nuclear hormone receptors provide tests for the accuracy and validity of our method. In each case, the evolutionary trace delineates the functional epitope and identifies residues critical to binding specificity. Based on mutational evolutionary analysis and on the structural homology of protein families, this simple and versatile approach should help focus site-directed mutagenesis studies of structure-function relationships in macromolecules, as well as studies of specificity in molecular recognition. More generally, it provides an evolutionary perspective for judging the functional or structural role of each residue in protein structure.