Modern livestock breeding programs feature accurate breeding value estimation and heavy use of reproductive technology. Such programs lead to rapid genetic progress, but inbreeding can accumulate rapidly due to increased impact of a few selected families. Inbreeding is increasing at an accelerating rate in most species, and economic losses due to inbreeding depression are a serious concern. Inbreeding depression occurs for performance traits, such as growth or milk production, and for health traits, such as fertility or survival. Crossbreeding can alleviate inbreeding problems in commercial populations of some species, but programs based on rotational crossing or continual F1 production (with in vitro fertilization) require purebred parental lines. The apparently large size of many livestock breeds is misleading, because inbreeding depends on the effective population size. The latter is a function of selection intensity and bears little resemblance to actual population size, so commercial populations of several million animals can easily have an effective population size of fewer than 100. Strategies for maintaining genetic variation by restricting relationships between selected animals or artificially increasing the emphasis on within-family information appear promising, but these may require a sacrifice in near term economic gains to maintain long term genetic diversity. Corrective mating programs are widely used in certain species, and these can be easily modified to consider inbreeding avoidance. Mate selection based on total economic merit adjusted for inbreeding depression is most efficient, and this approach can lead to significant economic benefits in the next generation.