Animals but especially plants and microbes are a source of a significant proportion of our medicines and industrial compounds. Arguably, their cultivation and preservation for this purpose is nothing new. However, the emergent genetic engineering of plants and animals to be used as recombinant biofactories for the production of therapeutic or industrial chemicals warrants thorough hazard identification and risk evaluation. Unlike the use of transgenic, or genetically modified, microorganisms for this purpose, plants and animals cannot be contained to the same degree at commercial scales of production. This report will focus on the risks to human health and the environment of using transgenic plants and animals as biofactories for recombinant human lactoferrin (rhLf). The economic and social implications are detailed in other reports in this series (Goven et al., 2008, Kaye-Blake et al., 2007). Transgenic organisms including plants and animals are being designed to produce pharmaceuticals, such as recombinant proteins that are secreted in milk. Presently, there are pre-commercial developments of rice plants and cows that can express rhLf. Transgenic sources may be harnessed to reduce costs and the potentials for undesirable contaminants.Transgenic “biofactories” producing pharmaceutical products (e.g., PMPs: plant-made pharmaceuticals) and industrial chemicals (e.g., PMIPs: plant-made industrial products), or foods of altered nutritional value, also can pose special risks to human and animal health. Pharmaceutical compounds have profound physiological effects. Molecules with these attributes are unlikely to act solely in the manner sought by clinicians. Human lactoferrin (hLf) is a protein with several known, distinct functions and others that remain only partially understood. The expression of this compound outside of its normal species and tissue ranges for the lifetime of transgenic organisms occupying different environments, creates a new combination of potentially undesirable outcomes. These will be identified and discussed as far as possible. Human lactoferrin1 is a whey protein found in human milk. It binds iron (Fe) and other metals, such as aluminium, chromium, cobalt, copper, gallium, magnesium and zinc. Fe-binding activity is associated with lactoferrin’s broad-spectrum anti-bacterial effects and is sufficient on its own to explain its activity as a bacteriostatic antibiotic for many bacteria. A derivative of the molecule, called lactoferricin, is bactericidal. That is, it is sufficient to kill certain bacteria through its effects on their membranes. Beyond this, lactoferrin has anti-viral, anti-fungal, immunomodulatory and antioxidant properties, demonstrated activity against some tumours, and other physiological roles. Several structural characteristics of the protein are particularly relevant to a safety assessment. First, the protein has secondary structures that could be important for predicting its potential to aggregate, and form a general cytotoxin (i.e., a compound that kills cells). Second, the protein is normally glycosylated. This affects predictions of its potential to be an allergen. RhLf may be used as a human medicine both in acute infections and as a prophylactic. It may also have uses as a veterinary medicine. Expression in animals and plants may affect microbes that normally inhabit these organisms and those that cause diseases in them. Because rhLf has species-specific effects on bacteria and viruses, its expression at agricultural scales may have implications for the development of resistance to lactoferrin and possibly other important antibiotics (e.g., aminoglycoside antibiotics) in pathogens of plants, animals or humans because of both the scale and diversity of non-target organisms exposed. In addition, some bacteria that cause disease use lactoferrin to acquire iron from their environments and thus specifically thrive in its presence. Lactoferrin has a tendency to aggregate and form amyloid fibrils. Any protein that makes amyloids may be infectious even if it does not cause known diseases such as those caused by prions (amyloid fibrils of other proteins). The tendency of a protein to form fibrils can be influenced both by its concentration and its biophysical environment. Both of these variables are uniquely affected when a protein is made in a genetically modified organism (GMO). The implications of fibrils are their potential infectious transmissibility and health implications for the GMO. Lactoferrin and especially rhLf may create new risks to people or animals susceptible to developing oral sensitivity to this potential allergen. Formation of autoantibodies to lactoferrin is a common observation in patients suffering from a number of diseases, although the relevance to the diseases or their complications has not been established. The propensity of humans to develop immune responses to bovine and goat milk suggests that the reverse might also be true, and this would be a potential welfare issue for animal biofactories. Finally, the possible effects of rhLf on wildlife that feed on biofactories are unknown. An intriguing property of lactoferrin is that it binds DNA, and transports DNA into cells with lactoferrin receptors. Lactoferrin binds specific DNA sequences that are expected to occur by chance at reasonably high frequencies in mammalian and plant genomes. These sequences also are important for gene expression regulation in the presence of lactoferrin, making lactoferrin a transcription regulator. Bacteria that import lactoferrin may also be able to acquire the DNA to which it is bound, thereby increasing horizontal gene transfer. Some risks of rhLF are unique to, or highly pronounced by, its production in plant or animal biofactories because biofactories increase both the scale of exposure to non-target organisms and the diversity of non-target organisms exposed. To determine the actual implications of plant or animal biofactories of rhLf will require regulatory authorities to recognise each of these potential harm pathways and either evaluate the possibilities of harm management or ask for relevant new research. In sum, the most immediate risk factors of producing rhLf in transgenic plants or animals derive from the protein’s toxic effects on microbes, fungi and viruses, and its potential to elicit an immune response in people when it is derived from GMOs. The potential of rhLF to aggregate into amyloid fibrils and to act as a gene transfer agent are poorly understood risk factors but they are both possibly of profound importance. Long-term studies will be required to better understand these risks.