The understanding of molecular recognition processes of small ligands and biological macromolecules requires a complete characterization of the binding energetics and correlation of thermodynamic data with interacting structures involved. A quantitative description of the forces that govern molecular associations requires determination of changes of all thermodynamic parameters, including free energy of binding (deltaG), enthalpy (deltaH), and entropy (deltaS) of binding and the heat capacity change (deltaCp). A close insight into the binding process is of significant and practical interest, since it provides the fundamental know-how for development of structure-based molecular design-strategies. The only direct method to measure the heat change during complex formation at constant temperature is provided by isothermal titration calorimetry (ITC). With this method one binding partner is titrated into a solution containing the interaction partner, thereby generating or absorbing heat. This heat is the direct observable that can be quantified by the calorimeter. The use of ITC has been limited due to the lack of sensitivity, but recent developments in instrument design permit to measure heat effects generated by nanomol (typically 10-100) amounts of reactants. ITC has emerged as the primary tool for characterizing interactions in terms of thermodynamic parameters. Because heat changes occur in almost all chemical and biochemical processes, ITC can be used for numerous applications, e.g., binding studies of antibody-antigen, protein-peptide, protein-protein, enzyme-inhibitor or enzyme-substrate, carbohydrate-protein, DNA-protein (and many more) interactions as well as enzyme kinetics. Under appropriate conditions data analysis from a single experiment yields deltaH, K(B), the stoichiometry (n), deltaG and deltaS of binding. Moreover, ITC experiments performed at different temperatures yield the heat capacity change (deltaCp). The informational content of thermodynamic data is large, and it has been shown that it plays an important role in the elucidation of binding mechanisms and, through the link to structural data, also in rational drug design. In this review we will present a comprehensive overview to ITC by giving some historical background to calorimetry, outline some critical experimental and data analysis aspects, discuss the latest developments, and give three recent examples of studies published with respect to macromolecule-ligand interactions that have utilized ITC technology.