Electrostatic energies provide what is arguably the most effective tool for structure–function correlation of biological molecules. Here, we provide an overview of the current state-of-the-art simulations of electrostatic energies in macromolecules, emphasizing the microscopic perspective but also relating it to macroscopic approaches. We comment on the convergence issue and other problems of the microscopic models and the ways of keeping the microscopic physics while moving to semi-macroscopic directions. We discuss the nature of the protein dielectric “constants” reiterating our long-standing point that the dielectric “constants” in semi-macroscopic models depend on the definition and the specific treatment. The advances and the challenges in the field are illustrated considering different functional properties including pKa's, redox potentials, ion and proton channels, enzyme catalysis, ligand binding, and protein stability. We emphasize the microscopic overcharging approach for studying pKa's of internal groups in proteins and give a demonstration of power of this approach. We also emphasize recent advances in coarse grained models with a physically based electrostatic treatment and provide some examples including further directions in treating voltage activated ion channels. Proteins 2011; © 2011 Wiley-Liss, Inc.