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Revealing functional units in protein-protein interaction (PPI) networks are important for understanding cellular functional organization. Current algorithms for identifying functional units mainly focus on cohesive protein complexes which have more internal interactions than external interactions. Most of these approaches do not handle overlaps among complexes since they usually allow a protein to belong to only one complex. Moreover, recent studies have shown that other non-cohesive structural functional units beyond complexes also exist in PPI networks. Thus previous algorithms that just focus on non-overlapping cohesive complexes are not able to present the biological reality fully. Here, we develop a new regularized sparse random graph model (RSRGM) to explore overlapping and various structural functional units in PPI networks. RSRGM is principally dominated by two model parameters. One is used to define the functional units as groups of proteins that have similar patterns of connections to others, which allows RSRGM to detect non-cohesive structural functional units. The other one is used to represent the degree of proteins belonging to the units, which supports a protein belonging to more than one revealed unit. We also propose a regularizer to control the smoothness between the estimators of these two parameters. Experimental results on four S. cerevisiae PPI networks show that the performance of RSRGM on detecting cohesive complexes and overlapping complexes is superior to that of previous competing algorithms. Moreover, RSRGM has the ability to discover biological significant functional units besides complexes.