The prediction of a protein's function from its 3D structure is becoming more and more important as the worldwide structural genomics initiatives gather pace and continue to solve 3D structures, many of which are of proteins of unknown function. Here, we present a methodology for predicting function from structure that shows great promise. It is based on 3D templates that are defined as specific 3D conformations of small numbers of residues. We use four types of template, covering enzyme active sites, ligand-binding residues, DNA-binding residues and reverse templates. The latter are templates generated from the target structure itself and scanned against a representative subset of all known protein structures. Together, the templates provide a fairly thorough coverage of the known structures and ensure that if there is a match to a known structure it is unlikely to be missed. A new scoring scheme provides a highly sensitive means of discriminating between true positive and false positive template matches. In all, the methodology provides a powerful new tool for function prediction to complement those already in use.