The ability to introduce DNA sequences (e.g., genes) of interest into the germline genome has rendered the mouse a powerful and indispensable experimental model in fundamental and medical research. The DNA sequences can be integrated into the genome randomly or into a specific locus by homologous recombination, in order to: (1) delete or insert mutations into genes of interest to determine their function, (2) introduce human genes into the genome of mice to generate animal models enabling study of human-specific genes and diseases, e.g., mice susceptible to infections by human-specific pathogens of interest, (3) introduce individual genes or genomes of pathogens (such as viruses) in order to examine the contributions of such genes to the pathogenesis of the parent pathogens, (4) and last but not least introduce reporter genes that allow monitoring in vivo or ex vivo the expression of genes of interest. Furthermore, the use of recombination systems, such as Cre/loxP or FRT/FLP, enables conditional induction or suppression of gene expression of interest in a restricted period of mouse's lifetime, in a particular cell type, or in a specific tissue. In this review, we will give an updated summary of the gene targeting technology and discuss some important considerations in the design of gene-targeted mice.