Dynamic protein interactions play a significant part in many cellular processes. A technique that shows considerable promise in elucidating such interactions is Förster resonance energy transfer (FRET). When combined with multiple, colored fluorescent proteins, FRET permits high spatial resolution assays of protein-protein interactions in living cells. Because FRET signals are usually small, however, their measurement requires careful interpretation and several control experiments. Nevertheless, the use of FRET in cell biological experiments has exploded over the past few years. Here we describe the physical basis of FRET and the fluorescent proteins appropriate for these experiments. We also review the approaches that can be used to measure FRET, with particular emphasis on the potential artifacts associated with each approach.