Domains present one of the most useful levels at which to understand protein function, and domain family-based analysis has had a profound impact on the study of individual proteins. Protein domain discovery has been progressing steadily over the past 30 years. What are the realistically achievable goals of sequence-based domain analysis, and how far off are they for the sequences encoded in eukaryotic genomes? Here we address some of the issues involved in better coverage of sequence-based domain annotation, and the integration of these results within the wider context of genomes, structures and function.