Current structural genomics projects are yielding structures for proteins whose functions are unknown. Accordingly, there is a pressing requirement for computational methods for function prediction. Here we present PHUNCTIONER, an automatic method for structure-based function prediction using automatically extracted functional sites (residues associated to functions). The method relates proteins with the same function through structural alignments and extracts 3D profiles of conserved residues. Functional features to train the method are extracted from the Gene Ontology (GO) database. The method extracts these features from the entire GO hierarchy and hence is applicable across the whole range of function specificity. 3D profiles associated with 121 GO annotations were extracted. We tested the power of the method both for the prediction of function and for the extraction of functional sites. The success of function prediction by our method was compared with the standard homology-based method. In the zone of low sequence similarity (approximately 15%), our method assigns the correct GO annotation in 90% of the protein structures considered, approximately 20% higher than inheritance of function from the closest homologue.