Recent advances in microbial genomics suggest that several protein domains are common to bacterial and eukaryotic regulatory proteins. In particular, developmentally and morphologically complex prokaryotes appear to share several signaling modules with eukaryotes. New experimental studies and information from domain architectures point to several similar mechanistic themes in bacterial and eukaryotic signaling proteins. Laterally transferred protein domains, originally of bacterial provenance, appear to have contributed to the evolution of sensory pathways related to light, redox and nitric oxide signaling, and developmental pathways, such as Notch, cytokine and cytokinin signaling in eukaryotes.