The post-translational sulfation of tyrosine residues occurs in numerous secreted and integral membrane proteins and, in many cases, plays a crucial role in controlling the interactions of these proteins with physiological binding partners as well as invading pathogens. Recent advances in our understanding of protein tyrosine sulfation have come about owing to the cloning of two human tyrosylprotein sulfotransferases (TPST-1 and TPST-2), the development of novel analytical and synthetic methodologies and detailed studies of proteins and peptides containing sulfotyrosine residues. In this article, we describe the TPST enzymes, review the major techniques available for studying the presence, location and function of tyrosine sulfation in proteins and discuss the biological functions and biochemical interactions of several proteins (or protein families) in which tyrosine sulfation influences the protein function. In particular, we describe the detailed evidence supporting the importance of tyrosine sulfation in the cellular adhesion function of P-selectin glycoprotein ligand-1, the leukocyte trafficking and pathogen invasion functions of chemokine receptors and the ligand binding and activation of other G-protein-coupled receptors by complement proteins, phospholipdis and glycoprotein hormones.