The field of protein misfolding and aggregation has become an extremely active area of research in recent years. Of particular interest is the deposition of polypeptides into inclusion bodies inside bacterial cells. One reason for this interest is that protein aggregation constitutes a major bottleneck in protein production and restricts the spectrum of protein-based drugs available for commercialization. Additionally, prokaryotic cells could provide a simple yet powerful system for studying the formation and prevention of toxic aggregates, such as those responsible for a number of degenerative diseases. Here, we review recent work that has challenged our understanding of the structure and physiology of inclusion bodies and provided us with a new view of intracellular protein deposition, which has important implications in microbiology, biomedicine and biotechnology.