Members of the MADS-box transcription factor family play essential roles in almost every developmental process in plants. Many MADS-box genes have conserved functions across the flowering plants, but some have acquired novel functions in specific species during evolution. The analyses of MADS-domain protein interactions and target genes have provided new insights into their molecular functions. Here, we review recent findings on MADS-box gene functions in Arabidopsis and discuss the evolutionary history and functional diversification of this gene family in plants. We also discuss possible mechanisms of action of MADS-domain proteins based on their interactions with chromatin-associated factors and other transcriptional regulators.