Pairwise sequence comparison methods have been assessed using proteins whose relationships are known reliably from their structures and functions, as described in the SCOP database [Murzin, A. G., Brenner, S. E., Hubbard, T. & Chothia C. (1995) J. Mol. Biol. 247, 536-540]. The evaluation tested the programs BLAST [Altschul, S. F., Gish, W., Miller, W., Myers, E. W. & Lipman, D. J. (1990). J. Mol. Biol. 215, 403-410], WU-BLAST2 [Altschul, S. F. & Gish, W. (1996) Methods Enzymol. 266, 460-480], FASTA [Pearson, W. R. & Lipman, D. J. (1988) Proc. Natl. Acad. Sci. USA 85, 2444-2448], and SSEARCH [Smith, T. F. & Waterman, M. S. (1981) J. Mol. Biol. 147, 195-197] and their scoring schemes. The error rate of all algorithms is greatly reduced by using statistical scores to evaluate matches rather than percentage identity or raw scores. The E-value statistical scores of SSEARCH and FASTA are reliable: the number of false positives found in our tests agrees well with the scores reported. However, the P-values reported by BLAST and WU-BLAST2 exaggerate significance by orders of magnitude. SSEARCH, FASTA ktup = 1, and WU-BLAST2 perform best, and they are capable of detecting almost all relationships between proteins whose sequence identities are >30%. For more distantly related proteins, they do much less well; only one-half of the relationships between proteins with 20-30% identity are found. Because many homologs have low sequence similarity, most distant relationships cannot be detected by any pairwise comparison method; however, those which are identified may be used with confidence.