One year after the release of the sequence of yeast chromosome III, we have re‐examined its open reading frames (ORFs) by computer methods. More than 61% of the 171 probable gene products have significant sequence similarities in the current databases; as many as 54% have already known functions or are related to functionally characterized proteins, allowing partial prediction of protein function, 11 percentage points more than reported a year ago; 19% are similar to proteins of known three‐dimensional structure, allowing model building by homology. The most interesting new identifications include a sugar kinase distantly related to ribokinases, a phosphatidyl serine synthetase, a putative transcription regulator, a flavodoxin‐like protein, and a zinc finger protein belonging to a distinct subfamily. Several ORFs have similarities to uncharacterized proteins, resulting in new families in search of a function’. About 54% of ORFs match sequences from other phyla, including numerous fragments in the database of expressed sequence tags (ESTs). Most significant similarities to ESTs are with proteins in conserved families widely represented in the databases. About 30% of ORFs contain one or more predicted transmembrane segments. The increase in the power of functional and structural prediction comes from improvements in sequence analysis and from richer databases and is expected to facilitate substantially the experimental effort in characterizing the function of new gene products.