ABSTRACT Understanding the mechanisms that modulate horizontal genetic exchange in prokaryotes is a key problem in biology. DNA entry is limited by resident host-dependent restriction-modification (RM) systems (HDRM), which are present in most prokaryotic genomes. This review specifically focuses on the biological functions of HDRM, rather than detailed enzyme mechanisms. DNA in each cell carries epigenetic marks imposed by host-modifying enzymes (HDM), most often not only base methylation but also additions to the phosphodiester backbone. The pattern of base and backbone modifications is read by host-restriction enzymes (HDR). Broadly, HDRM systems read the pattern of chemical modifications to DNA at host-determined (HD) sites to regulate the fate of incoming mobile DNA. An inappropriate pattern may be restricted either due to the absence of protective modification or its presence; the latter activity is mediated by modification-dependent restriction enzymes (MDRE). Most often, restriction occurs via nuclease-mediated degradation, but it can also act via other mechanisms that prevent the initiation of replication. Like other genome-defense systems, HDRM systems are highly diverse and somewhat modular. The basic functions required for action in vivo and the protein domains responsible for each function are addressed here. Particularly under-studied among the latter are the interaction domains that control the launch of highly toxic activities such as HDR. These have been evolutionarily shuffled to build a variety of classical RM systems as well as more divergent systems.