Genomic sequence must be associated with the course of genome annotation for it to become useful and comprehensible. Annotation are notes that contain information about the cellular role and mechanism of action of genes and their products. However, they are both faced with quantitative and qualitative challenges. Quantitative in the sense that it is quite impossible to annotate all proteins with our available resources, while facing qualitative problem as there will be no experimental evidence to annotate. Thus, the current status of modern procedures that are used for manual genome annotation are presented. In addition, computational methods and software infrastructure are also discussed which are used for analyzing protein function. Processes on the reduction of error level of automatically generated annotation are also described. Lastly, problems in gene prediction with the focus on improving the quality of functional inference are also detailed.