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Somatic cloning is emerging as a new biotechnology by which the opportunities arising from the advances in molecular genetics and genome analysis can be implemented in animal breeding. Significant improvements have been made in SCNT protocols in the past years which now allow to embarking on practical applications. The main areas of application of SCNT are: Reproductive cloning, therapeutic cloning and basic research. A great application potential of SCNT based cloning is the production of genetically modified (transgenic) animals. Somatic cell nuclear transfer based transgenic animal production has significant advances over the previously employed microinjection of foreign DNA into pronuclei of zygotes. This cell based transgenesis is compatible with gene targeting and allows both, the addition of a specific gene and the deletion of an endogenous gene. Efficient transgenic animal production provides numerous opportunities for agriculture and biomedicine. Regulatory agencies around the world have agreed that food derived from cloned animals and their offspring is safe and there is no scientific basis for questioning this. Commercial application of somatic cloning within the EU is via the Novel Food regulation EC No. 258/97. Somatic cloning raises novel questions regarding the ethical and moral status of animals and their welfare which has prompted a controversial discussion in Europe which has not yet been resolved.