Zinc finger nuclease (ZFN) is an artificially engineered hybrid protein that contains a zinc finger protein (ZFP) domain and a Fok I endonuclease cleavage domain. It has recently emerged as a powerful molecular tool for targeted genome modifications. ZFNs recognize and bind to specific DNA sequences to generate a double-strand break (DSB) by its nuclease activity. Based on this finding, various genetic methods, including gene targeting (gene disruption), gene addition, gene correction etc., are being designed to manipulate the genomes of different species at specific loci. One particular advantage of this new technique is its broad applications, which can be employed to generate desirable inheritable mutations both at the organismal level and at the cellular level. Here, we review the recent progress and prospects of ZFN technology. This article focused on the mechanism of how it works, currently available target assessment, ZFP library construction and screening methods, target modification strategies, as well as a collection of specie and genes that have been successfully modified by ZFN. This review will provide a useful reference for researchers who are interested in applying this new technique in their studies.