Martin Evans identified and isolated the embryonic stem cell of the early embryo, the cell from which all cells of the adult organism are derived. He established it in cell culture, modified it genetically, and reintroduced it into foster mothers in order to generate a genetically modified offspring. Mario Capecchi and Oliver Smithies, independently of each other, discovered how homologous recombination between segments of DNA molecules can be used to target genes in the mammalian genome and developed methods to generate genetically modified mice. Such animals have become indispensable in medical research. Furthermore, the knowledge concerning stem cell biology and gene technology obtained during the research that led to the “knockout mouse” has changed our understanding of normal development and disease processes and identified new avenues for medical therapy. Fig. 1 shows the general strategy for gene targeting in mice.