Sexual selection theory is a robust and dynamic field within evolutionary biology, yet despite decades of research, remarkably little is known of the mechanistic bases of mate choice and male competition. Because many aspects of sexual selection involve dynamic movements, and are physically challenging, the limits of sexual selection may be defined by key functional and physiological variables (i.e. the ‘functional approach’). We advocate the functional approach for providing mechanistic resolution on the adaptive basis of sexual structures and signals, the nature of mate choice and how males compete, among other issues. An overview of recent work, highlighted in this special issue, shows that many features of sexual selection, including the outcome of male fights, the morphology and design of sexual signals, and the nature of mate choice, all appear to be dictated in large part by functional and physiological parameters. We argue that the functional approach provides a potent tool for resolving several unresolved issues in sexual selection theory, particularly the nature of male quality, the handicap and indicator models of sexual selection, and the basis of mate choice.