Host-parasite coevolution is a dynamic process that can be studied at the phenotypic, genetic, and molecular levels. Although much of what we currently know about coevolution has been learned through phenotypic measures, recent advances in molecular techniques have provided tools to greatly deepen this research. Both the availability of full-genome sequences and the increasing feasibility of high-throughput gene expression profiling are leading to the discovery of genes that have a key role in antagonistic interactions between naturally coevolving species. Identification of such genes can enable direct observation, rather than inference, of the host-parasite coevolutionary dynamic. The Daphnia magna-Pasteuria ramosa host-parasite model is a prime example of an interaction that has been well studied at the population and whole-organism levels, and much is known about genotype- and environment-specific interactions from a phenotypic perspective. Now, with the recent completion of genome sequences for two Daphnia species, and a transcriptomics project under way, coevolution between these two enemies is being investigated directly at the level of interacting genes.