Sustained cultures of avian embryonic stem cells are provided. Injection of avian embryonic stem cells into recipient embryos yields chimeras with a significant contribution from the embryonic stem cell phenotype. Transgene encoding exogenous proteins are stably integrated in the embryonic stem cells and are present in the somatic tissue of the resulting chimeras. The transgenes may encode exogenous proteins expressed in endodermal, ectodermal, mesodermal, or extra embryonic tissue. Breeding the resulting chimera yields transgenic birds whose genome is comprised of exogenous DNA.