We show that gene co-expression, which generally provides only a very weak signal for the prediction of functional interactions, can provide a reliable signal by exploiting evolutionary conservation. The encoded proteins of conserved co-expressed gene pairs are highly likely to be part of the same pathway not only after speciation (98%), but also after parallel gene duplication (97%). Conserved co-expression combined with homology data enables us to predict specific gene functions. The use of conservation between parallel duplicated gene pairs to predict function is especially promising given that gene duplication is common in eukaryotes, and that data from only a single organism can be used.