Protein function is often regulated by posttranslational modifications (PTMs), and recent advances in mass spectrometry have resulted in an exponential increase in PTM identification. However, the functional significance of the vast majority of these modifications remains unknown. To address this problem, we compiled nearly 200,000 phosphorylation, acetylation, and ubiquitination sites from 11 eukaryotic species, including 2,500 newly identified ubiquitylation sites for Saccharomyces cerevisiae. We developed methods to prioritize the functional relevance of these PTMs by predicting those that likely participate in cross-regulatory events, regulate domain activity, or mediate protein-protein interactions. PTM conservation within domain families identifies regulatory "hot spots" that overlap with functionally important regions, a concept that we experimentally validated on the HSP70 domain family. Finally, our analysis of the evolution of PTM regulation highlights potential routes for neutral drift in regulatory interactions and suggests that only a fraction of modification sites are likely to have a significant biological role.