The development of sophisticated genetic tools during the past 15 years have facilitated a tremendous increase of fundamental and application-oriented knowledge of lactic acid bacteria (LAB) and their bacteriophages. This knowledge relates both to the assignments of open reading frames (ORF's) and the function of non-coding DNA sequences. Comparison of the complete nucleotide sequences of several LAB bacteriophages has revealed that their chromosomes have a fixed, modular structure, each module having a set of genes involved in a specific phase of the bacteriophage life cycle. LAB bacteriophage genes and DNA sequences have been used for the construction of temperature-inducible gene expression systems, gene-integration systems, and bacteriophage defence systems. The function of several LAB open reading frames and transcriptional units have been identified and characterized in detail. Many of these could find practical applications, such as induced lysis of LAB to enhance cheese ripening and re-routing of carbon fluxes for the production of a specific amino acid enantiomer. More knowledge has also become available concerning the function and structure of non-coding DNA positioned at or in the vicinity of promoters. In several cases the mRNA produced from this DNA contains a transcriptional terminator-antiterminator pair, in which the antiterminator can be stabilized either by uncharged tRNA or by interaction with a regulatory protein, thus preventing formation of the terminator so that mRNA elongation can proceed. Evidence has accumulated showing that also in LAB carbon catabolite repression in LAB is mediated by specific DNA elements in the vicinity of promoters governing the transcription of catabolic operons. Although some biological barriers have yet to be solved, the vast body of scientific information presently available allows the construction of tailor-made genetically modified LAB. Today, it appears that societal constraints rather than biological hurdles impede the use of genetically modified LAB.