Besides providing useful model systems for basic science, studies based on modification of the mammalian germ line are changing our understanding of pathogenetic principles. In this article, we review the most popular techniques for generating specific germ line mutations in vivo and discuss the impact of various transgenic models on the study of neurodegenerative diseases. The "gain of function" approach, i.e., ectopic expression of exogenous genes in neural structures, has deepened our understanding of neurodegeneration resulting from infection with papova viruses, picorna viruses, and human retroviruses. Further, inappropriate expression of mutated cellular molecules in the nervous system of transgenic mice is proving very useful for studying conditions whose pathogenesis is controversial, such as Alzheimer's disease and motor neuron diseases. As a complementary approach, ablation of entire cell lineages by tissue-specific expression of toxins has been useful in defining the role of specific cellular compartments. Modeling of recessive genetic diseases, such as Lesch-Nyhan syndrome, was helped by the development of techniques for targeted gene deletion (colloquially termed "gene knock-out"). Introduction of subtle homozygous mutations in the mouse genome was made possible by the latter approach. Such "loss of function" mutants have been used for clarifying the role of molecules thought to be involved in development and structural maintenance of the nervous system, such as the receptors for nerve growth factor and the P0 protein of peripheral myelin. In addition, these models are showing their assets also in the study of enigmatic diseases such as spongiform encephalopathies.