One of the primary goals of functional genomics is to provide a quantitative understanding of gene function. However, the success of this enterprise is dependent on the accuracy and precision of the functional genomic data. A novel approach, digital analysis-of gene expression (DAGE) described herein, is an accurate and precise technology for measuring digital gene expression on a relative or absolute scale by simply counting the number of transcripts of a gene being expressed at a given time. The result is a greatly improved technology sensitive enough for identifying and quantifying small (but biologically important and statistically relevant) changes in gene expression. Fourteen genes involved in galactose metabolism in Saccharomyces cerevisiae were analyzed for their expression levels in glucose and galactose minimal media. The quantitative expression results were characterized in terms of distributional and accuracy attributes; they were also in general agreement (in terms of direction of change) with corresponding results obtained using microarray technology. DAGE is likely to have profound implications in the field of functional genomics because the gene expression measurements are digital in nature and therefore more accurate than any other technologies. (C) 2004 Wiley Periodicals, Inc.