A computer analysis of 2328 protein sequences comprising about 60% of the Escherichia coli gene products was performed using methods for database screening with individual sequences and alignment blocks. A high fraction of E. coli proteins--86%--shows significant sequence similarity to other proteins in current databases; about 70% show conservation at least at the level of distantly related bacteria, and about 40% contain ancient conserved regions (ACRs) shared with eukaryotic or Archaeal proteins. For > 90% of the E. coli proteins, either functional information or sequence similarity, or both, are available. Forty-six percent of the E. coli proteins belong to 299 clusters of paralogs (intraspecies homologs) defined on the basis of pairwise similarity. Another 10% could be included in 70 superclusters using motif detection methods. The majority of the clusters contain only two to four members. In contrast, nearly 25% of all E. coli proteins belong to the four largest superclusters--namely, permeases, ATPases and GTPases with the conserved "Walker-type" motif, helix-turn-helix regulatory proteins, and NAD(FAD)-binding proteins. We conclude that bacterial protein sequences generally are highly conserved in evolution, with about 50% of all ACR-containing protein families represented among the E. coli gene products. With the current sequence databases and methods of their screening, computer analysis yields useful information on the functions and evolutionary relationships of the vast majority of genes in a bacterial genome. Sequence similarity with E. coli proteins allows the prediction of functions for a number of important eukaryotic genes, including several whose products are implicated in human diseases.