BACKGROUND: The relationship between the regulatory design and the functionality of molecular networks is a key issue in biology. Modules and motifs have been associated to various cellular processes, thereby providing anecdotal evidence for performance based localization on molecular networks. RESULTS: To quantify structure-function relationship we investigate similarities of proteins which are close in the regulatory network of the yeast Saccharomyces Cerevisiae. We find that the topology of the regulatory network only show weak remnants of its history of network reorganizations, but strong features of co-regulated proteins associated to similar tasks. These functional correlations decreases strongly when one consider proteins separated by more than two steps in the regulatory network. The network topology primarily reflects the processes that is orchestrated by each individual hub, whereas there is nearly no remnants of the history of protein duplications. CONCLUSION: Our results suggests that local topological features of regulatory networks, including broad degree distributions, emerge as an implicit result of matching a number of needed processes to a finite toolbox of proteins.