Gene modification of stem cells prior to their transplantation enhances their survival and increases their function in cell therapy. Like the famous Trojan horse, the gene-modified cell has to gain entrance into the host's walls and survive to deliver its transgene products. Using cellular, molecular, and gene manipulation techniques, the transplanted cell can be protected in a hostile environment from immune rejection, inflammation, hypoxia, and apoptosis. Genetic engineering to modify cells involves construction of functional gene sequences and their insertion into stem cells. The modifications can be simple reporter genes or complex cassettes with gene switches, cell-specific promoters, and multiple transgenes. We discuss methods to deliver and construct gene cassettes with viral and nonviral delivery, siRNA, and conditional Cre/Lox P. We review the current uses of gene-modified stem cells in cardiovascular disease, diabetes, and hemophilia.