Methods and compositions for detecting molecular interactions, particularly protein-protein interactions, using at least two inactive, weakly-complementing β-lactamase fragments are provided. The invention allows detection of such interactions in eukaryotic and mammalian cells, in situ or in vitro. Detection of molecular interactions in mammalian cells is not limited to the nuclear compartment, but can be accomplished in the cytoplasm, cell surface, organelles, or between these entities. Methods provided utilize novel compositions comprising fusion proteins between molecules of interest and inactive, weakly-complementing β-lactamase fragments. Association of the molecules of interest brings the corresponding complementary β-lactamase fragments into close enough proximity for complementation to occur and β-lactamase activity to be observed. The invention is useful in the study of protein-protein interactions, functional genomics, agonist and antagonist screening and drug discovery.