Plastid transformation has emerged as an alternative platform to generate transgenic plants. Attractive features of this technology include specific integration of transgenes—either individually or as operons—into the plastid genome through homologous recombination, the potential for high-level protein expression, and transgene containment because of the maternal inheritance of plastids. Several issues associated with nuclear transformation such as gene silencing, variable gene expression due to the Mendelian laws of inheritance, and epigenetic regulation have not been observed in the plastid genome. Plastid transformation has been successfully used for the production of therapeutics, vaccines, antigens, and commercial enzymes, and for engineering various agronomic traits including resistance to biotic and abiotic stresses. However, these demonstrations have usually focused on model systems such as tobacco, and the technology per se has not yet reached the market. Technical factors limiting this technology include the lack of efficient protocols for the transformation of cereals, poor transgene expression in non-green plastids, a limited number of selection markers, and the lengthy procedures required to recover fully segregated plants. This article discusses the technology of transforming the plastid genome, the positive and negative features compared with nuclear transformation, and the current challenges that need to be addressed for successful commercialization.