Current applications of gene transfer in farm animals include the improvement of product quality and quantity, disease resistance, the production of valuable proteins in the mammary gland or other organs, the genetic modification of pigs for xenotransplantation and the generation of new animal models in cases where rodent models are not sufficient for studying the problem under evaluation. Although DNA microinjection into pronuclei of zygotes from various farm animal species has happened since 1985, the efficiency of this method is low. Further drawbacks are related to the random integration process which may cause mosaicism, insertional mutations and varying expression due to position effects. Sperm-mediated gene transfer is not routinely established yet, although the mechanisms of binding and internalisation of DNA by sperm cells is becoming increasingly clearer. New protocols for the use of retroviral vectors to infect metaphase II oocytes which are subsequently fertilised resulted in efficient production of transgenic cattle. In spite of extensive efforts to establish pluripotent stem cells from farm animal species, no germ-line competent cells have been reported in mammalian species other than mouse so far. However, recent success in cloning sheep, cattle, goats and pigs from cultured cells provides an alternative route for efficient and targeted genetic modifications of farm animals.