Antibodies are important tools for experimental research and medical applications. Most antibodies are composed of two heavy and two light chains. Both chains contribute to the antigen-binding site which is usually flat or concave. In addition to these conventional antibodies, llamas, other camelids, and sharks also produce antibodies composed only of heavy chains. The antigen-binding site of these unusual heavy chain antibodies (hcAbs) is formed only by a single domain, designated VHH in camelid hcAbs and VNAR in shark hcAbs. VHH and VNAR are easily produced as recombinant proteins, designated single domain antibodies (sdAbs) or nanobodies. The CDR3 region of these sdAbs possesses the extraordinary capacity to form long fingerlike extensions that can extend into cavities on antigens, e.g., the active site crevice of enzymes. Other advantageous features of nanobodies include their small size, high solubility, thermal stability, refolding capacity, and good tissue penetration in vivo. Here we review the results of several recent proof-of-principle studies that open the exciting perspective of using sdAbs for modulating immune functions and for targeting toxins and microbes.