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Dramatic advances in sequencing technology and sophisticated experimental assays that interrogate the cell, combined with the public availability of the resulting data, herald the era of systems biology. However, the biological functions of more than 40% of the genes in sequenced genomes are unknown, posing a fundamental barrier to progress in systems biology. The large scale and diversity of available data requires the development of techniques that can automatically utilize these datasets to make quantified and robust predictions of gene function that can be experimentally verified. We present a service called the VIRtual Gene Ontology (VIRGO) that (i) constructs a functional linkage network (FLN) from gene expression and molecular interaction data, (ii) labels genes in the FLN with their functional annotations in the Gene Ontology and (iii) systematically propagates these labels across the FLN in order to precisely predict the functions of unlabelled genes. VIRGO assigns confidence estimates to predicted functions so that a biologist can prioritize predictions for further experimental study. For each prediction, VIRGO also provides an informative 'propagation diagram' that traces the flow of information in the FLN that led to the prediction. VIRGO is available at http://whipple.cs.vt.edu:8080/virgo.