Global population will increase to over nine billion by 2050 with the doubling in demand for meat and milk. To overcome this challenge, it is necessary to breed highly efficient and productive livestock. Furthermore, livestock are also excellent models for human diseases and ideal bioreactors to produce pharmaceutical proteins. Thus, genetic engineering of domestic animals presents a critical and valuable tool to address these agricultural and biomedical applications. Overall, genetic engineering has evolved through three stages in history: transgenesis, gene targeting, and gene editing. Since the birth of the first transgenic pig, genetic engineering in livestock has been advancing slowly due to inherent technical limitations. A major breakthrough has been the advent of somatic cell nuclear transfer, which, for the first time, provided the technical ability to produce site-specific genome-modified domestic animals. However, the low efficiency of gene targeting events in somatic cells prohibits its wide use in agricultural and biomedical applications. Recently, rapid progress in tools and methods of genome engineering has been made, allowing genetic editing from mutation of a single base pair to the deletion of entire chromosomes. Here, we review the major advances of genetic engineering in domestic animals with emphasis placed on the introduction of latest designer nucleases.