Abstract Genetically engineered animals enable the study of gene function and disease pathophysiology in efficient, precise, and complex ways. Detailed genomic information for numerous laboratory mouse and rat strains is in the public domain, and international, multilaboratory consortia have made significant headway in characterizing the phenotypic outcomes of mutating every protein-encoding gene in the mouse. The number of engineered models resulting from random insertion as well as targeted deletion or replacement of specific genes is ever expanding. The discovery and development of new products, especially medical therapies, rely on genetically modified animal models to define new targets, elucidate mechanisms of disease and toxicity, and screen products for efficacy and safety. Engineered models for use in drug development include mouse models of human metabolism, mouse models for mutagenicity testing and carcinogenicity assessment, and genetically immunodeficient mice and rats that support the growth of human tissue xenografts suitable for in vivo studies of cancer treatments and nonclinical safety assessment of human cell-based products. Genetically engineered livestock are used as bioreactors to produce therapeutic proteins (“biopharming”); as donors for cell, organ, and tissue xenotransplantation; and increasingly as a source of food products. Toxicologic pathology assessments of genetically modified animals and their products employ the same endpoints that are used in conventional nonclinical safety assessment studies for biomolecules, chemicals, drugs, and cell products. Additional factors that must be considered when analyzing genetically engineered animals include knowledge of the induced mutation and the caveats of the method used in generating a given model, the potential for species-specific molecular mechanisms (where the responses of animals to inserted human gene products often do not recapitulate the human responses), and the possible introduction and propagation of animal pathogens into humans by xenografting infected cells or organs.