Populus species and hybrids are intensively cultivated as sources of woody biomass for the forest products industry and for reforestation of lowlands in temperate regions of the world. However, the long generation time of trees, the presence of seasonal dormancy and the prolonged period required for evaluation of mature traits are strong limitations for classical breeding and selection. The development of methods for in vitro culture and genetic engineering has increased the possibility of producing poplar genotypes improved in insect pest resistance, herbicide tolerance, growth rate and wood quality, or reduction in undesirable traits. Poplar has become a model system in forest tree biotechnology due to several useful features: small genome size, short rotation cycle, rapid growth rate and ease of vegetative propagation. The combination of molecular techniques and classical breeding will help create forest trees with positive effects on the environment. However, risks associated with the biotechnological applications (concerning the impact on biodiversity, long-term adaptation, transgene inheritance and stability) should be carefully evaluated and field tests performed with transgenic poplar.