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Public sequence databases contain information on the sequence, structure and function of proteins. Genome sequencing projects have led to a rapid increase in protein sequence information, but reliable, experimentally verified, information on protein function lags a long way behind. To address this deficit, functional annotation in protein databases is often inferred by sequence similarity to homologous, annotated proteins, with the attendant possibility of error. Now, the functional annotation in these homologous proteins may itself have been acquired through sequence similarity to yet other proteins, and it is generally not possible to determine how the functional annotation of any given protein has been acquired. Thus the possibility of chains of misannotation arises, a process we term ‘error percolation’. With some simple assumptions, we develop a dynamical probabilistic model for these …