Increasing competition in the livestock industry has forced producers to cut costs by adopting new technologies aimed at increasing production efficiency. One particularly promising technology is feeding enzymes as supplements for animal diets. Supplementation of diets for non-ruminants (e.g., swine and poultry) with fibrolytic enzymes, such as cellulases, xylanases and beta-glucanases, increases the feed conversion efficiency and growth rate of the animals. Enzymatic hydrolysis of plant cell wall polymers (e.g., cellulose, xylan, beta-glucans) releases glucose and xylose and eliminates the antinutritional effects of beta-glucans and arabinoxylans. Enzyme supplementation of diets for ruminants has also been shown to improve growth performance, even though the rumen itself represents the most potent fibrolytic fermentation system known. Implementation of this technology in the livestock industry has been limited largely because of the cost of development and production of enzymes. Over the last decade, however, developments in recombinant DNA technology have increased the efficiency of existing microbial production systems and facilitated exploitation of alternative sources of industrial enzymes. The ruminal ecosystem is among the novel enzyme sources currently being explored. Understanding the role of enzymes in feed digestion through characterization of the enzymology and genetics involved in digestion of feedstuffs by ruminants will provide insight required to improve the products currently available to producers. Characterization of genes encoding a variety of hydrolytic enzymes, such as cellulases, xylanases, beta-glucanases, amylases, pectinases, proteases, phytases and tannases, will foster the development of more efficacious enzyme supplements and enzyme expression systems for enhancing nutrient utilization by domestic animals. Characteristics of the original source organism need no longer restrict the production of a useful enzyme. Recent reports of transgenic plants expressing fibrolytic or phytase activity and of transgenic mice able to produce endoglucanase in the pancreas speak to the feasibility of improving feed digestion through genetic modification of the feedstuffs and the animals.