Transgenic models provide a means of understanding the molecular mechanisms for the temporal, spatial, and stimulus-responsive regulation of gene expression in vivo and importantly the pathophysiological consequences of the altered expression of a normal or mutated gene. To facilitate the application of transgenic models in lung research, this review describes several practical considerations in generation of transgenic mice. The potential of transgenic models in lung research is also illustrated by depicting the current models in lung research including those for understanding lung gene regulation, tumorigenesis, mutation detection, antioxidant defense, emphysema, fibrosis, and hypertension. The impact of important new development of producing transgenic mice carrying large fragments of DNA contained in yeast artificial chromosomes to achieve proper control of transgene expression and gene targeting technology is also discussed. It is anticipated that transgenic models will provide invaluable information in future lung research.