During the last decade several major breakthroughs have been achieved in mushroom biotechnology, which greatly enhanced classical mushroom breeding. DNA-based technologies such as restriction fragment length polymorphisms and randomly amplified polydisperse DNA sequences have allowed for a measure of genetic diversity, for the isolation of homokaryons, for the determination of inheritance of nuclear and mitochondrial markers, and for the production of a genetic linkage map. The recent availability of ready-to-use and affordable DNA technologies has resulted in a substantial increase in the number of Agaricus bisporus genes that have been identified and characterized. A major breakthrough was achieved in 1996 when the first successful and stable transformation system of A. bisporus was reported. Together, the availability of an increasing number of known genes and the possibility to produce transgenic mushrooms will result in a better understanding of the molecular, physiological and biochemical processes that are essential for mushroom production, shelf life and quality aspects such as flavor, texture and disease resistance. Some potential targets for strain improvement are discussed, such as the genes involved in brown discoloration, substrate utilization, carbon and nitrogen metabolism, and fruit body development.