Microinjection of DNA constructs into pronuclei of zygotes has been the method of choice for the generation of transgenic livestock. However, this procedure is characterized by low efficiency (1-4% transgenic offspring), random integration and variable expression of the transgene as well as a considerable proportion of mosaicism. Furthermore, it is extremely time consuming and costly. As a consequence, commercial application has focused on the production of recombinant proteins in the mammary gland of transgenic animals and xenotransplantation, e.g. the use of porcine organs in human organ transplantation. In addition, transgenic pigs carrying a modified porcine growth hormone (hMt-pGH) construct show significant improvements in economically important traits without adverse side effects of a GH overproduction. Improvements of transgenic technology will likely come from the generation of appropriate cell lines suitable for transfection or even homologous recombination and their subsequent use in nuclear transfer. Additionally, in the mouse a number of sophisticated molecular tools have been developed that allow precise modifications of the genome. These include the application of artificial chromosomes from yeast (YAC) or bacteria (BAC) for position-independent and copy-number-dependent expression of a transgene, the Tet-system (tetracycline inducible) for a tight temporal control of transgene expression, as well as conditional mutagenesis by applying site-specific DNA recombinases (e.g. Cre, FLP). The successful adaptation of these molecular tools to livestock will enable the fulfillment of many of the promises originally thought to be achievable when transgenic livestock were first reported.