We present an analysis of 203 completed genomes in the Gene3D resource (including 17 eukaryotes), which demonstrates that the number of protein families is continually expanding over time and that singleton-sequences appear to be an intrinsic part of the genomes. A significant proportion of the proteomes can be assigned to fewer than 6000 well-characterized domain families with the remaining domain-like regions belonging to a much larger number of small uncharacterized families that are largely species specific. Our comprehensive domain annotation of 203 genomes enables us to provide more accurate estimates of the number of multi-domain proteins found in the three kingdoms of life than previous calculations. We find that 67% of eukaryotic sequences are multi-domain compared with 56% of sequences in prokaryotes. By measuring the domain coverage of genome sequences, we show that the structural genomics initiatives should aim to provide structures for less than a thousand structurally uncharacterized Pfam families to achieve reasonable structural annotation of the genomes. However, in large families, additional structures should be determined as these would reveal more about the evolution of the family and enable a greater understanding of how function evolves.