Textbooks define "genetic engineering" as "the application of in vitro procedures for the manipulation, recombination, and expression of DNA and the development of genetically modified organisms."

The discovery of restriction enzymes (or restriction endonucleases) was an important development in genetic engineering. Restriction enzymes can be found in bacteria and serve as a defense mechanism (e.g. against viruses). What is distinctive about them is that they can discern specific base sequences (so-called recognition sites) and cleave them. As such they are a kind of natural "gene scissors". Restriction enzymes have been bioengineered to improve their efficiency, which led to the development of the modern techniques of genome editing. The most famous genome editing technique is the CRISPR/Cas9 technique (see also the module Genome editing).

Restriction enzymes play an important role in cloning (the replication of DNA sequences). This biotechnological method involves so-called vectors that serve as a vehicle to insert specific DNA sequences (e.g. genes) into an organism (mostly bacteria). Frequently used vectors are plasmids, i.e. DNA molecules that can be found in bacteria but are independent of chromosomal DNA. Now, restriction enzymes cut both the plasmids and the DNA sequence at the respective recognition site. Then, the cut DNA sequence is inserted into the plasmid. Finally, the resultant recombinant plasmid is introduced into the bacterium, in which it replicates.

Since the chemical structure of DNA is nearly identical in all living organisms, genes are transferable between different species. An organism that has been inserted genes from another organism is called a transgenic organism. An example particularly relevant in pharmaceutics and medicine is insulin, which is extracted from bacteria with the method described above.