Transgenic animals are produced by inserting foreign genes into their genomes using recombinant DNA methodology. This allows for increased growth, improved disease resistance, and other benefits. However, it can also lead to unintended effects if the inserted gene has multiple functions or causes mutations. Common methods to create transgenic animals include embryonic stem cell methods, pronuclear injection, and retrovirus-mediated gene transfer. Examples include transgenic mice, cows, fish, sheep, and monkeys that are used for various purposes like producing human proteins, studying diseases, and reducing animal testing in medical research.