This review addresses the possible consequences of a mismatch in length between the hydrophobic part of membrane-spanning proteins and the hydrophobic bilayer thickness for membrane structure and function. Overviews are given first of the results of studies in defined model systems. These studies address effects of mismatch on protein activity, stability, orientation, aggregational state, localization, and conformation. With respect to the lipids, effects of mismatch are discussed on lipid chain order, phase transition temperature, lipid phase behavior, and microdomain formation. From these studies, it is concluded that hydrophobic mismatch can strongly affect protein and lipid organization, but that the precise consequences depend on the individual properties of the proteins and lipids. Examples of these properties include the propensity of lipids to form non-lamellar structures, the amino acid composition of the hydrophobic transmembrane segments of the proteins, the nature of the membrane anchoring residues, and the number of transmembrane helices. Finally, the effects of mismatch in biological membranes are discussed and its possible consequences for functional membrane processes, such as protein sorting, protein insertion, and regulation of bilayer thickness.