The DIRECT project aims to determine direct distances to two important galaxies in the cosmological distance ladder - M31 and M33 - using detached eclipsing binaries (DEBs) and Cepheids. I will review the results of the survey and discuss four promising detached eclipsing binary systems located in these galaxies. I will also present preliminary results of photometric and spectroscopic follow-up observations. 2004 Elsevier B.V. All rights reserved.