Every entirely sequenced genome reveals 100 s to 1000 s of protein sequences for which the only annotation available is 'hypothetical protein'. Thus, in the human genome and in the genomes of pathogenic agents there could be 1000 s of potential, unexplored drug targets. Computational prediction of protein function can play a role in studying these targets. We shall review the challenges, research approaches and recently developed tools in the field of computational function-prediction and we will discuss the ways these issues can change the process of drug discovery.