Dairy biotechnology is fast gaining ground in the area of altering milk composition for processing and/or animal and human health by employing nutritional and genetic approaches. Modification of the primary structure of casein, alteration in the lipid profile, increased protein recovery, milk containing nutraceuticals, and replacement for infant formula offer several advantages in the area of processing. Less fat in milk, altered fatty acid profiles to include more healthy fatty acids such as CLA and ω‐fats, improved amino acid profiles, more protein, less lactose, and absence of β‐lactoglobulin (β‐LG) are some opportunities of “designing” milk for human health benefits. Transgenic technology has also produced farm animals that secrete in their milk, human lactoferrin, lysozyme, and lipase so as to simulate human milk in terms of quality and quantity of these elements that are protective to infants. Cow milk allergenicity in children could be reduced by eliminating the β‐LG gene from bovines. Animals that produce milk containing therapeutic agents such as insulin, plasma proteins, drugs, and vaccines for human health have been genetically engineered. In order to cater to animal health, transgenic animals that express in their mammary glands, various components that work against mastitis have been generated. The ultimate acceptability of the “designer” products will depend on ethical issues such as animal welfare and safety, besides better health benefits and increased profitability of products manufactured by the novel techniques.