Vast tracts of noncoding DNA contain elements that regulate gene expression in higher eukaryotes. Describing these regulatory elements and understanding how they evolve represent major challenges for biologists. Advances in the ability to survey genome-scale DNA sequence data are providing unprecedented opportunities to use evolutionary models and computational tools to identify functionally important elements and the mode of selection acting on them in multiple species. This chapter reviews some of the current methods that have been developed and applied on noncoding DNA, what they have shown us, and how they are limited. Results of several recent studies reveal that a significantly larger fraction of noncoding DNA in eukaryotic organisms is likely to be functional than previously believed, implying that the functional annotation of most noncoding DNA in these organisms is largely incomplete. In Drosophila, recent studies have further suggested that a large fraction of noncoding DNA divergence observed between species may be the product of recurrent adaptive substitution. Similar studies in humans have revealed a more complex pattern, with signatures of recurrent positive selection being largely concentrated in conserved noncoding DNA elements. Understanding these patterns and the extent to which they generalize to other organisms awaits the analysis of forthcoming genome-scale polymorphism and divergence data from more species.