Three-dimensional domain swapping is the event by which a monomer exchanges part of its structure with identical monomers to form an oligomer where each subunit has a similar structure to the monomer. The accumulating number of observations of this phenomenon in crystal structures has prompted speculation as to its biological relevance. Domain swapping was originally proposed to be a mechanism for the emergence of oligomeric proteins and as a means for functional regulation, but also to be a potentially harmful process leading to misfolding and aggregation. We highlight experimental studies carried out within the last few years that have led to a much greater understanding of the mechanism of domain swapping and of the residue- and structure-specific features that facilitate the process. We discuss the potential biological implications of domain swapping in light of these findings.