Serial analysis of gene expression (SAGE) technology produces large sets of interesting genes that are difficult to analyze directly. Bioinformatics tools are needed to interpret the functional information in these gene sets. We present an interactive web-based tool, called Gene Class, which allows functional annotation of SAGE data using the Gene Ontology (GO) database. This tool performs searches in the GO database for each SAGE tag, making associations in the selected GO category for a level selected in the hierarchy. This system provides user-friendly data navigation and visualization for mapping SAGE data onto the gene ontology structure. This tool also provides graphical visualization of the percentage of SAGE tags in each GO category, along with confidence intervals and hypothesis testing.