Embryonic stem (ES) cells derived from pluripotent cells of the early mouse embryo provide a powerful tool for genome manipulation in mammals. Dominantly acting effects can be achieved by introducing constructs to misexpress or ectopically express a gene product, express an altered product or express antisense constructs. Use of ES cell chimeras to analyse the effects of such alterations may provide information not readily available from transgenic mice. However, the most important use of ES cells, to date, is in the generation of recessive mutations, either in known genes by targeted mutagenesis or randomly by insertional mutagenesis. Examples of these approaches and possible future strategies are discussed.