BACKGROUND: The past few years have seen a rapid development in novel high-throughput technologies that have created large-scale data on protein-protein interactions (PPI) across human and most model species. This data is commonly represented as networks, with nodes representing proteins and edges representing the PPIs. A fundamental challenge to bioinformatics is how to interpret this wealth of data to elucidate the interaction of patterns and the biological characteristics of the proteins. One significant purpose of this interpretation is to predict unknown protein functions. Although many approaches have been proposed in recent years, the challenge still remains how to reasonably and precisely measure the functional similarities between proteins to improve the prediction effectiveness. RESULTS: We used a Semantic and Layered Protein Function Prediction (SLPFP) framework to more effectively predict unknown protein functions at different functional levels. The framework relies on a new protein similarity measurement and a clustering-based protein function prediction algorithm. The new protein similarity measurement incorporates the topological structure of the PPI network, as well as the protein's semantic information in terms of known protein functions at different functional layers. Experiments on real PPI datasets were conducted to evaluate the effectiveness of the proposed framework in predicting unknown protein functions. CONCLUSION: The proposed framework has a higher prediction accuracy compared with other similar approaches. The prediction results are stable even for a large number of proteins. Furthermore, the framework is able to predict unknown functions at different functional layers within the Munich Information Center for Protein Sequence (MIPS) hierarchical functional scheme. The experimental results demonstrated that the new protein similarity measurement reflects more reasonably and precisely relationships between proteins.