Metabolic Engineering (ME) has been defined as “the improvement of cellular activities by manipulation of enzymatic, transport, and regulatory functions of the cell with the use of recombinant DNA technology”; (Bailey, J. E. (1991). Science, 252: 1668-1674) . ME is a proven, powerful approach to studying and optimizing fermentation processes. It consists of the following steps, all of which are used in our research projects: (1) construction of recombinant strains with improved properties by introducing specific genetic modifications (genotype engineering); (2) comprehensive characterization of wild-type and recombinant strains (phenotype characterization); and (3) integration of the results of phenotypic characterization and design of the next targets for genetic engineering (integration and design). We are implementing a ME cycle in the postgenomic era by putting functional genomics and systems biology tools to the service of ME. Functional genomics and systems biology tools are used in steps two and three of the cycle: i.e., system-wide phenotypic characterization and integration of the data thus obtained. Currently, we are using the ME approach to obtain strains that will efficiently produce biofuels as well as bulk and specialty chemicals. We are also using the so-called inverse (metabolic) engineering approach: first we obtain strains that overproduce the desired product via mutagenesis and selection (an approach also known as evolutionary engineering), and later we identify mutations/changes responsible for high product titers by using functional genomics and systems biology tools. This knowledge/information is then used for the direct/rational implementation of genetic modifications, thus entering the ME cycle described above.