Due to recent innovations in gene editing technology, great progress has been made in livestock breeding, with researchers rearing gene-edited pigs, cattle, sheep, and other livestock. Gene-editing technology involves knocking in, knocking out, deleting, inhibiting, activating, or replacing specific bases of DNA or RNA sequences at the genome level for accurate modification, and such processes can edit genes at a fixed point without needing DNA templates. In recent years, although clustered regularly interspaced short palindromic repeats (CRISPR)/Cas9 system-mediated gene-editing technology has been widely used in research into the genetic breeding of animals, the system’s efficiency at inserting foreign genes is not high enough, and there are certain off-target effects; thus, it is not appropriate for use in the genome editing of large livestock such as cashmere goats. In this study, the development status, associated challenges, application prospects, and future prospects of CRISPR/Cas9-mediated precision gene-editing technology for use in livestock breeding were reviewed to provide a theoretical reference for livestock gene function analysis, genetic improvement, and livestock breeding that account for characteristics of local economies.