GloFish are the offspring of genetically modified Zebrafish, originally modified with genes from a sea anemone and jellyfish. The intent was to hopefully engineer a switching mechanism to control the glowing effect so that it was only triggered in the presence of certain pollutants. This would allow the modified fish to act as a pollution detector.

As Zebrafish are a tropical species, there's is no environmental risk outside of tropical regions, since the fish simply cannot survive in the wild. Besides the glowing, the GloFish are identical to regular Zebrafish (besides being at a severe disadvantage versus predators), so escaped fish in tropical regions will have little environmental impact.

There's no known health risks, and no reason to believe there are any. Nobody recommends eating them, but the same is true of regular Zebrafish.

Supposedly, some man discovered he could inject the color into a regular danio (zebra fish) from a saltwater fish that glows. I have had several of these fish, and they do not fade in color. There behavior is no different from ordinary zebra fish and they are just as hardy.

This is how Glofish came about:
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In 1999, Dr. Zhiyuan Gong and his colleagues at the National University of Singapore were working with a gene called green fluorescent protein (GFP), originally extracted from a jellyfish, that naturally produced bright green bioluminescence. They inserted the gene into a zebrafish embryo, allowing it to integrate into the zebrafish's genome, which caused the fish to be brightly fluorescent under both natural white light and ultraviolet light. Their goal was to develop a fish that could detect pollution by selectively fluorescing in the presence of environmental toxins. The development of the always fluorescing fish was the first step in this process. Shortly thereafter, his team developed a line of red fluorescent zebra fish by adding a gene from a sea coral, and yellow fluorescent zebra fish, by adding a variant of the jellyfish gene.
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They are not reproduced in the United States because they came from tropical climate and cannot survive the temperate North American climate.

They are not injected with dye. They are genetically altered zebra danio. Researchers often tag genes of interest with florescent proteins to see what the gene does, and these fish ar often used for research as they are cheap, easy to maintain, and easy to breed. I suspect that is how these got started. They grow a bit slower than the wild type, but then the proteins are bigger because the body has to build the tag too, so it makes sense. From the batch of fry mine had in my tank, it seems that they have been inbred quite a bit. Out of 100 fry I had about 5 that were mutated. That number seems high to me. Other than that, they are the same as other zebras in my experience.

The original zebrafish (Danio rerio) from which the GloFish was developed is a native of rivers in India and Bangladesh. It measures three centimeters long and has gold and dark blue stripes, and over 200 million have been sold in the last 50 years in the United States ornamental fish market. Despite the number of zebrafish sold, they have never established any reproducing populations in the United States, primarily because they are tropical fish, unable to survive in the temperate North American climate.

In 1999, Dr. Zhiyuan Gong and his colleagues at the National University of Singapore were working with a gene called green fluorescent protein (GFP), originally extracted from a jellyfish, that naturally produced bright green bioluminescence. They inserted the gene into a zebrafish embryo, allowing it to integrate into the zebrafish's genome, which caused the fish to be brightly fluorescent under both natural white light and ultraviolet light. Their goal was to develop a fish that could detect pollution by selectively fluorescing in the presence of environmental toxins. The development of the always fluorescing fish was the first step in this process. Shortly thereafter, his team developed a line of red fluorescent zebra fish by adding a gene from a sea coral, and yellow fluorescent zebra fish, by adding a variant of the jellyfish gene. Later, a team of Taiwanese researchers at the National University of Taiwan, headed by Professor Huai-Jen Tsai (蔡懷禎), succeeded in creating a medaka (rice fish) with a fluorescent green color.

The scientists from NUS and businessmen Alan Blake & Richard Crockett from Yorktown Technologies, L.P., a company in Austin, Texas, met and a deal was signed whereby Yorktown obtained the worldwide rights to market the GloFish. At around the same time, a separate deal was made between Taikong, the largest aquarium fish producer in Taiwan, and the Taiwanese researchers to market the green medaka in Taiwan under the name TK-1. In spring of 2003, Taiwan became the first to authorize sales of a genetically modified organism as a pet. One hundred thousand fish were reported sold in less than a month at US$18.60 a piece. It should be clarified that the fluorescent medaka are not GloFish, as they are not marketed by Yorktown Technologies, but instead by Taikong Corp under a different brand name.