Loss of yield in rice due to low temperature is a world wide phenomenon. Efforts to improve cold tolerance using conventional cross-breeding methods have had limited success. This project aims to use genetic engineering to produce rice with improved quality and cold tolerance. The strategy to be employed requires a highly efficient transformation system. For successful high efficiency genetic transformation of commercial Australian rice cultivars it was essential to determine the most suitable conditions and parameters to introduce DNA into embryogenic rice tissues by means of microprojectile bombardment. This was accomplished by optimising the conditions for transient expression of the reporter gene Gus in cultured immature embryos and mature embryo derived calli. An efficient system for the regeneration of plants from both immature and mature embryo derived callus has been developed. The optimised system is now being used to develop a protocol for stable transformation of rice. For this purpose we have used the bar gene in combination with the herbicide Basta to produce herbicide resistant rice plants. Following bombardment, the tissues were transferred to selection medium containing Basta. The selection conditions and the procedure for selection of stable transformants were determined based on the result of control experiments. This research is supported by a Rural Industries Research and Development grant.