The feasibility of introducing foreign genes into the genomes of cattle, goats, pigs, and sheep has only recently been demonstrated. Studies have thus far focused on improving growth efficiency or directing expression of pharmaceutical proteins to the mammary glands of these species. The general strategy for producing transgenic livestock and mice is similar. In addition to the obvious difference in scale between mice and livestock experiments, there are noteworthy obstacles that significantly reduce the efficiency of producing transgenic livestock. Low embryo viability, low transgene integration rates, and high animal costs contribute to project costs that can easily exceed hundreds of thousands of dollars. A better understanding of the mechanisms that govern transgene integration should lead to improved efficiencies. But, the full potential of the transgenic livestock system will not be fully realized until: 1 ) gene constructs can be designed that function in a reproducible, predictable manner; and 2) the genetic control of physiological processes are more clearly elucidated. Newly emerging approaches may resolve at least some of these issues within the next decade. Published 1992 Wiley-Liss, inc.