The generation of genetically modified animals or plants with gene-targeted deletions or modifications is a powerful tool to analyze gene function, study disease and produce organisms of economical interest. Until recently, the generation of animals with gene targeted manipulations has been accomplished by homologous recombination (HR) in embryonic stem (ES) cells or cloning through nuclear transfer and has been limited to a few species. Recently, a new technology based on the use of gene-targeted zinc-finger nucleases (ZFNs) was developed and used for the generation of organisms with gene-targeted deletions and/or modifications when combined with HR. ZFNs have been used to generate modified organisms such as plants, Drosophila, zebra fish and rats with gene-targeted mutations. This perspective manuscript is a short review on the use of ZFNs for the genetic engineering of plants and animals, with particular emphasis on our recent work involving rats. We also discuss the application of other targeted nucleases, including homing endonucleases. Microinjection of plasmid or mRNA for ZFNs into rat embryos allowed targeted, rapid, complete, permanent and heritable disruption of endogenous loci. The application of ZFNs to generate gene-targeted knockouts in species where ES cells or cloning techniques are not available is an important new development to answer fundamental biological questions and develop models of economical interest such as for the production of humanized antibodies. Further refinements of ZFN technology in combination with HR may allow knock-ins in early embryos even in species where ES cells or cloning techniques are available.