Post-synaptic density-95, disks-large and zonula occludens-1 (PDZ) domains are small globular protein-protein interaction domains widely conserved from yeast to humans. They are composed of ∼90 amino acids and form a classical two α-helical/six β-strand structure. The prototypical ligand is the C-terminus of partner proteins; however, they also bind internal peptide sequences. Recent findings indicate that PDZ domains also bind phosphatidylinositides and cholesterol. Through their ligand interactions, PDZ domain proteins are critical for cellular trafficking and the surface retention of various ion channels. In addition, PDZ proteins are essential for neuronal signaling, memory, and learning. PDZ proteins also contribute to cytoskeletal dynamics by mediating interactions critical for maintaining cell-cell junctions, cell polarity, and cell migration. Given their important biological roles, it is not surprising that their dysfunction can lead to multiple disease states. As such, PDZ domain-containing proteins have emerged as potential targets for the development of small molecular inhibitors as therapeutic agents. Recent data suggest that the critical binding function of PDZ domains in cell signaling is more than just glue, and their binding function can be regulated by phosphorylation or allosterically by other binding partners. These studies also provide a wealth of structural and biophysical data that are beginning to reveal the physical features that endow this small modular domain with a central role in cell signaling.