Hydroxy fatty acids produced in plant seed oil are important industrial material. This review focuses on the use of metabolic engineering approaches for the production of hydroxy fatty acids in transgenic plants. Vegetable oil is not only edible but can also be used for industrial purposes. The industrial demand for vegetable oil will increase with the continued depletion of fossil fuels and ensuing environmental issues such as climate change, caused by increased carbon dioxide in the air. Some plants accumulate high levels of unusual fatty acids in their seeds, and these fatty acids (FAs) have properties that make them suitable for industrial applications. Hydroxy fatty acids (HFAs) are some of the most important of these industrial FAs. Castor oil is the conventional source of HFA. However, due to the presence of toxin ricin in its seeds, castor is not cultivated on a large scale. Lesquerella is another HFA accumulator and is currently being developed as a new crop for a safe source of HFAs. The mechanisms of HFA synthesis and accumulation have been extensively studied using castor genes and the model plant Arabidopsis. HFAs accumulated to 17% in the seed oil of Arabidopsis expressing a FA hydroxylase gene from castor (RcFAH12), but its seed oil content and plant growth decreased. When RcFAH12 gene was coexpressed with additional castor gene(s) in Arabidopsis, ~30% HFAs were accumulated and the seed oil content and plant growth was almost restored to the wild-type level. Further advancement of our understanding of pathways, genes and regulatory mechanisms underlying synthesis and accumulation of HFAs is essential to developing and implementing effective genetic approaches for enhancing HFA production in oilseeds.