Plant biotechnology - especially in vitro regeneration and cell biology, DNA manipulation and biochemical engineering - is already changing the agricultural scene in three major areas: control of plant growth, protecting plants against biotic stress, and production of specialty foods, biochemicals and pharmaceuticals. Plant biotechnology faces several major challenges in the coming decades: alleviating the hazards of abiotic stress (especially salinity, drought, and extreme temperatures), improving pest control, maintenance and improvement of the environment, improvement of food quality and design of 'specialty food' using biochemical engineering, and production of biomaterials. Two parallel research approaches will most likely exist simultaneously in the near future: the transgenic approach (expression of unique genes and specific promoters and transcription factors), and the non-transgenic approach (genomics-assisted gene discovery, marker-assisted selection, efficient mutations, and clonal agriculture). Drought and salinity are the most serious threats to agriculture and to the environment in many parts of the world. Key molecular factors that are being used for genetic engineering of stress-tolerant plants include: over-expression of specific transcription factors, characterization of dehydrin proteins, over-production of osmoprotectants, expression of water channel proteins and ion transporters, expression and characterization of molecular chaperones, including a novel boiling-stable homo-oligomeric SP1 protein. Although molecular breeding is routine in agriculture, forest-tree species have been left far behind. However, the increasing demand for wood and its products and the reduction of available harvestable forests has recently led to the introduction of several molecular and biotechnological tools into forest-tree research and improvement. Among these are in vitro propagation, the identification of molecular markers, and genetic engineering for specific traits. Achievements today in plant biotechnology have already surpassed all previous expectations. The full realization and impact of the new developments depend not only on continued successful and innovative research and development activities, but also on a favorable regulatory climate and public acceptance. Plant scientists now have a central role in society.