As software becomes more and more complex, it is more and moreimportant to structure it well. Well-structured software is easy to writeand to debug, and provides a collection of modules that can be reusedto reduce future programming costs. In this paper we show that two fea-tures of functional languages in particular, higher-order functions and lazyevaluation, can contribute significantly to modularity. As examples, wemanipulate lists and trees, program several numerical algorithms, and im-plement the alpha-beta heuristic (an algorithm from Artificial Intelligenceused in game-playing programs). We conclude that since modularity is thekey to successful programming, functional programming offers importantadvantages for software development