Metabolic engineering has developed as a very powerful approach to optimising industrial fermentation processes through the introduction of directed genetic changes using recombinant DNA technology. Successful metabolic engineering starts with a careful analysis of cellular function; based on the results of this analysis, an improved strain is designed and subsequently constructed by genetic engineering. In recent years some very powerful tools have been developed, both for analysing cellular function and for introducing directed genetic changes. In this paper, some of these tools are reviewed and many examples of metabolic engineering are presented to illustrate the power of the technology. The examples are categorised according to the approach taken or the aim: (1) heterologous protein production, (2) extension of substrate range, (3) pathways leading to new products, (4) pathways for degradation of xenobiotics, (5) improvement of overall cellular physiology, (6) elimination or reduction of by-product formation, and (7) improvement of yield or productivity.