In vitro gamete and embryo production from stem cell cultures could revolutionize animal production by decreasing generation intervals, increasing the number of gametes per animal, and facilitating the widespread dissemination of elite and uniform genetics. In vitro reconstitution of germ cell development from mouse stem cells has recently been successful, resulting in offspring from completely in vitro generated gametes. Similarly, creation of embryos capable of undergoing gastrulation was achieved when combining multiple stem cells in both mice and humans. The recent isolation of stable bovine embryonic stem cells with in vivo pluripotency potential brings these technologies closer to a possible application in livestock genetics and reproduction. Although functional gametes or embryos with true reproductive potential are still to be obtained from livestock stem cells, it is likely only a matter of time before this goal is achieved. Advances and potential applications of embryonic stem cells in livestock reproduction will be discussed with emphasis on in vitro breeding approaches that could significantly shorten generational intervals and increase genetic progress in cattle.