The integrative properties of dendrites are determined by a complex mixture of factors, including their morphology, the spatio-temporal patterning of synaptic inputs, the balance of excitation and inhibition, and neuromodulatory influences, all of which interact with the many voltage-gated conductances present in the dendritic membrane. Recent efforts to grapple with this complexity have focused on identifying functional compartments in the dendritic tree, the number and size of which depend on the aspect of dendritic function being considered. We discuss how dendritic compartments and the interactions between them help to enhance the computational power of the neuron and define the rules for the induction of synaptic plasticity.