Transgenic technology is increasingly used in forest-tree breeding to overcome the disadvantages of traditional breeding methods, such as a long breeding cycle, complex cultivation environment, and complicated procedures. By introducing exogenous DNA, genes tightly related or contributed to ideal traits—including insect, disease, and herbicide resistance—were transferred into diverse forest trees, and genetically modified (GM) trees including poplars were cultivated. It is beneficial to develop new varieties of GM trees of high quality and promote the genetic improvement of forests. However, the low transformation efficiency has hampered the cultivation of GM trees and the identification of the molecular genetic mechanism in forest trees compared to annual herbaceous plants such as Oryza sativa. In this study, we reviewed advances in transgenic technology of forest trees, including the principles, advantages and disadvantages of diverse genetic transformation methods, and their application for trait improvement. The review provides insight into the establishment and improvement of genetic transformation systems for forest tree species. Challenges and perspectives pertaining to the genetic transformation of forest trees are also discussed.