The past year has seen the fruits of biotechnological manipulation of forest trees approach commercial application. Advances in somatic embryogenesis have brought mass clonal propagation of the top commercial trees closer to reality, and efficient gene transfer systems have been developed for a number of conifers and hardwoods. Radical alterations in the quantity and quality of lignin in wood have been shown to be possible in softwoods and hardwoods through identification of naturally occurring mutants, as well as by engineering the lignin biosynthetic pathway with transgenes. The potential environmental and social impacts of the release of transgenic trees have become an increasingly contentious issue that will require more attention if we are to use these technologies to their full advantage.