We review new and established methods for the chemical modification of proteins in living cells and highlight recent applications. The review focuses on tag-mediated protein labeling methods, such as the tetracysteine tag and SNAP-tag, and new developments in this field such as intracellular labeling with lipoic acid ligase. Recent promising advances in the incorporation of unnatural amino acids into proteins are also briefly discussed. We describe new tools using tag-mediated labeling methods including the super-resolution microscopy of tagged proteins, the study of the interactions of proteins and protein domains, the subcellular targeting of synthetic ion sensors, and the generation of new semisynthetic metabolite sensors. We conclude with a view on necessary future developments, with one example being the selective labeling of non-tagged, native proteins in complex protein mixtures.