Genetically modified laboratory animals provide a powerful approach for studying gene expression and regulation and allow one to directly examine structure-function and cause-and-effect relationships in pathophysiological processes. Today, transgenic mice are available as a research tool in almost every research institution. On the other hand, the development of a relatively large mammalian transgenic model, transgenic rabbits, has provided unprecedented opportunities for investigators to study the mechanisms of human diseases and has also provided an alternative way to produce therapeutic proteins to treat human diseases. Transgenic rabbits expressing human genes have been used as a model for cardiovascular disease, AIDS, and cancer research. The recombinant proteins can be produced from the milk of transgenic rabbits not only at lower cost but also on a relatively large scale. One of the most promising and attractive recombinant proteins derived from transgenic rabbit milk, human alpha-glucosidase, has been successfully used to treat the patients who are genetically deficient in this enzyme. Although the pronuclear microinjection is still the major and most popular method for the creation of transgenic rabbits, recent progress in gene targeting and animal cloning has opened new avenues that should make it possible to produce transgenic rabbits by somatic cell nuclear transfer in the future. Based on a computer-assisted search of the studies of transgenic rabbits published in the English literature here, we introduce to the reader the achievements made thus far with transgenic rabbits, with emphasis on the application of these rabbits as human disease models and live bioreactors for producing human therapeutic proteins and on the recent progress in cloned rabbits.