The rhomboid gene was discovered in Drosophila, where it encodes a seven transmembrane protein that is the signal-generating component of epidermal growth factor (EGF) receptor signaling during development. Although metazoan developmental regulators are rarely conserved outside the animal kingdom, rhomboid proteins are conserved in all kingdoms of life, but the significance of this remains unclear. Recent biochemical reconstitution and high-resolution crystal structures have provided proof that rhomboid proteins function as novel intramembrane proteases, with a serine protease-like catalytic apparatus embedded within the membrane bilayer, buried in a hydrophilic cavity formed by a protein ring. A thorough consideration of all known examples of rhomboid function suggests that, despite biochemical similarity in mechanism and specificity, rhomboid proteins function in diverse processes including quorum sensing in bacteria, mitochondrial membrane fusion, apoptosis, and stem cell differentiation in eukaryotes; rhomboid proteins are also now starting to be linked to human disease, including early-onset blindness, diabetes, and parasitic diseases. Regulating cell signaling is at the heart of rhomboid protein function in many, but not all, of these processes. Further study of these novel enzymes promises to reveal the evolutionary path of rhomboid protein function, which could provide insights into the forces that drive the molecular evolution of regulatory mechanisms.