In the mid-1980s, methods for making defined mutations to the genome of living cells were shown to be applicable in mammalian cells. These methods became known as gene targeting and were soon combined with techniques for manipulating totipotent mouse embryonic stem (ES*) cells, allowing researchers to generate mice homozygous for genetic changes that had been engineered in the test tube. Such targeted mice can display phenotypes that provide valuable information on gene function or can serve as models of human genetic disease. This powerful technology has already had a huge impact on a wide spectrum of biological disciplines. To date, most targeting experiments have involved disruption of the target gene, but methods for the creation of subtle, conditional, or tissue-specific mutations have been developed and are likely to become increasingly useful. Further in the future, gene targeting may well be used for the genetic modification of human somatic stem cells and ES cells from animals other than mice (e.g., pig or sheep) with major implications for autologous transplantation and xenotransplantaion, respectively. Our purpose in this brief overview is to survey established and emerging gene targeting methods, their use in understanding graft rejection, and potential applications in clinical transplantation. For a wider discussion of the techniques and their applications, the reader is referred to other reviews(1-5).