Eph receptors are the largest subfamily of receptor tyrosine kinases regulating cell shape, movements, and attachment. The interactions of the Ephs with their ephrin ligands are restricted to the sites of cell-cell contact since both molecules are membrane attached. This review summarizes recent advances in our understanding of the molecular mechanisms underlining the diverse functions of the molecules during development and in the adult organism. The unique properties of this signaling system that are of highest interest and have been the focus of intense investigations are as follows: (i) the signal is simultaneously transduced in both ligand-expressing cells and receptor-expressing cells, (ii) signaling via the same molecules can generate opposing cellular reactions depending on the context, and (iii) the Ephs and the ephrins are divided into two subclasses with promiscuous intrasubclass interactions, but rarely observed intersubclass interactions.