The use of transgenic animal models has transformed our knowledge of complex biochemical pathways in vivo. It has allowed disease processes to be modelled and used in the development of new disease prevention and treatment strategies. They can also be used to define cell- and tissue-specific pathways of gene regulation. A further major application is in the area of preclinical development where such models can be used to define pathways of chemical toxicity, and the pathways that regulate drug disposition. One major application of this approach is the humanisation of mice for the proteins that control drug metabolism and disposition. Such models can have numerous applications in the development of drugs and in their more sophisticated use in the clinic.