The spatial and temporal regulation of lipid molecules in cell membranes is a hallmark of cellular signaling and membrane trafficking events. Lipid-mediated targeting provides for strict control and versatility, because cell membranes harbor a large number of lipid molecules with variation in head group and acyl chain structures. Signaling and trafficking proteins contain a large number of modular domains that exhibit specific lipid binding properties and play a critical role in their localization and function. Nearly 20 years of research including structural, computational, biochemical and biophysical studies have demonstrated how these lipid-binding domains recognize their target lipid and achieve subcellular localization. The integration of this individual lipid-binding domain data in the context of the full-length proteins, macromolecular signaling complexes, and the lipidome is only beginning to be unraveled and represents a target of therapeutic development. This review brings together recent findings and classical concepts to concisely summarize the lipid-binding domain field while illustrating where the field is headed and how the gaps may be filled in with new technologies.