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Abstract: The homologous recombination mechanism for DNA-repair is not predominant in most filamentous fungi, resulting in extremely low targeting efficiencies for molecular engineering. To increase the gene targeting efficiency, it is becoming common practice to inactivate the non-homologous end-joining (NHEJ) pathway that causes random integration, by deleting the fungal homologs of the human KU70 and KU80 genes that encode proteins functioning in the NHEJ pathway. This has been described for several filamentous fungi, but limited knowledge on the physiological consequences is available. In this study we characterized targeting efficiency and physiology of penicillinG producing Penicillium chrysogenum strains, in which the KU70 or KU80 homologues hdfA and hdfB had been deleted. Targeting efficiency was increased from ca. 1% in the reference strain to 47% and 56% in the hdfA and hdfB mutant strains, respectively, using an ends-out construct. Physiological and transcriptome analysis of glucose-limited chemostat cultures of the hdfA deletion strain and the reference strain showed minimal differences. Although, in a direct competition experiment to assess strain fitness, the reference strain had a clear advantage over the deletion strain, the results demonstrate the potential of ΔhdfA P. chrysogenum strains for the functional analysis of the recently completed P. chrysogenum genome sequence and in further metabolic engineering of antibiotics production. [Copyright &y& Elsevier]