Naturally occurring enzymes are remarkable biocatalysts with numerous potential applications in industry and medicine. However, many of their catalyst properties often need to be further tailored to meet the specific requirements of a given application. Within this context, directed evolution has emerged over the past decade as a powerful tool for engineering enzymes with new or improved functions. This review summarizes recent advances in applying directed evolution approaches to alter various enzyme properties such as activity, selectivity (enantio- and regio-), substrate specificity, stability, and solubility. Special attention will be paid to the creation of novel enzyme activities and products by directed evolution.