The notion that sequence homology implies functional similarity underlies much of computational biology. In the case of protein-protein interactions, an interaction can be inferred between two proteins on the basis that sequence-similar proteins have been observed to interact. The use of transferred interactions is common, but the legitimacy of such inferred interactions is not clear. Here we investigate transferred interactions and whether data incompleteness explains the lack of evidence found for them. Using definitions of homology associated with functional annotation transfer, we estimate that conservation rates of interactions are low even after taking interactome incompleteness into account. For example, at a blastp E-value threshold of 10(-70), we estimate the conservation rate to be about 11 % between S. cerevisiae and H. sapiens. Our method also produces estimates of interactome sizes (which are similar to those previously proposed). Using our estimates of interaction conservation we estimate the rate at which protein-protein interactions are lost across species. To our knowledge, this is the first such study based on large-scale data. Previous work has suggested that interactions transferred within species are more reliable than interactions transferred across species. By controlling for factors that are specific to within-species interaction prediction, we propose that the transfer of interactions within species might be less reliable than transfers between species. Protein-protein interactions appear to be very rarely conserved unless very high sequence similarity is observed. Consequently, inferred interactions should be used with care.