Gene duplications are common in biology and are likely to be an important source of functional diversification and specialization. The yeast Saccharomyces cerevisiae underwent a whole-genome duplication event early in evolution, and a substantial number of duplicated genes have been retained. We identified more than 3500 instances where only one of two paralogous proteins undergoes posttranslational modification despite having retained the same amino acid residue in both. We also developed a web-based search algorithm (CoSMoS.c.) that scores conservation of amino acid sequences based on 1011 wild and domesticated yeast isolates and used it to compare differentially modified pairs of paralogous proteins. We found that the most common modifications-phosphorylation, ubiquitylation, and acylation but not N-glycosylation-occur in regions of high sequence conservation. Such conservation is evident even for ubiquitylation and succinylation, where there is no established 'consensus site' for modification. Differences in phosphorylation were not associated with predicted secondary structure or solvent accessibility but did mirror known differences in kinase-substrate interactions. Thus, differences in posttranslational modification likely result from differences in adjoining amino acids and their interactions with modifying enzymes. By integrating data from large-scale proteomics and genomics analysis, in a system with such substantial genetic diversity, we obtained a more comprehensive understanding of the functional basis for genetic redundancies that have persisted for 100 million years.