The human gastrointestinal (GI) tract hosts a heterogeneous microbial consortium, the gut microbiota, which is crucial for supporting host health. Factors such as antibiotic use, poor diet, aging, and infections contribute to gut dysbiosis. Microbiota imbalance has been linked to several GI disorders, including inflammatory bowel disease, antibiotic-associated diarrhea, foodborne infections, and colorectal cancer. Probiotics, live microorganisms that mimic beneficial gut bacteria, can restore gut homeostasis and help manage gut diseases through mechanisms such as pathogen inhibition, immune modulation, digestive aid, and antimicrobial production. However, traditional probiotics lack key traits, exhibit poor colonization potential, and struggle with reduced viability during processing and exposure to environmental and GI conditions. Recent advancements in molecular biology and nanotechnology have enabled the development of engineered probiotics through genetic engineering, chemical surface modification and their combinations. Genetic engineering enhances probiotic functionality by producing therapeutic molecules, while nanoencapsulation and biomaterial immobilization improve probiotic survival, colonization, and targeted delivery in the GI tract. This chapter examines the action mechanisms of probiotics and factors limiting the efficacy of native probiotics, explores strategies for designing engineered probiotics, and highlights recent advancements in using engineered probiotics for managing GI-related diseases, along with future directions in this field.