The ability to introduce specific alterations of endogenous genes into the germ line of mice via targeted mutagenesis in embryonic stem (ES) cells has represented a major breakthrough in mouse genetics. Gene inactivation has been widely used to examine the effects of loss of function in various biological processes such as development, cellular biology, and physiology. This has already permitted the accumulation of new insights into gene function and also the creation of mouse models of human genetic diseases. Introduction of subtle mutations at specific locations of the mammalian genome is also useful to refine genetic analysis and to produce models of genetic diseases which do not necessarily result from null mutations. Several strategies have been developed, each aimed at generating subtle mutations in a given gene (6). One common limitation to all current gene-targeting procedures is the low frequency of correct targeting. This becomes a serious problem especially with use of two successive rounds of targeting, a method common to several strategies used for the generation of mutated genes devoid of foreign selection sequences. Therefore, attempts have been made to increase the efficiency of gene targeting by several means, such as increasing the size of the region of homologies with the target locus, using isogenic genomic DNA, or improving the selection procedures (6). In this report, we present an alternative approach to overcome these limitations which relies on the observation that double-strand ends of broken chromosomes are highly recombinogenic (reviewed in reference 5). Double-strand breaks (DSB) are frequently associated with DNA alteration events in eukaryotes (4, 31); during meiosis in Saccharomyces cerevisiae, for example, transient DSB are induced at a number of positions known to be hot spots for recombination (23). It has recently been shown that a unique DSB can specifically be induced in the yeast (12), plant (24), and mammalian (8, 22, 26, 28) genomes by using the yeast I-SceI meganuclease. The I-SceI protein is an endonuclease responsible for intron homing in yeast mitochondria, a process that apparently proceeds by DSB repair (18); I-SceI endonuclease can induce recombination in yeast nuclei (12). In mammalian cells, the yeast meganuclease I-SceI has been shown to efficiently induce a DSB in a chromosomal target containing an I-SceI recognition sequence. This allows DNA break repair with high frequency by recombination with a donor molecule homologous to the regions flanking the break (7, 8, 22, 25, 26, 28). We reasoned that the introduction of a DSB in an endogenous gene could increase targeting frequency at this natural locus through stimulation of the cellular recombination machinery. The gene encoding villin, a major component of the actin cytoskeleton of intestine and kidney cells (13), was chosen to develop this gene targeting strategy. We found that induction of a DSB in the target gene by using the meganuclease I-SceI resulted in greatly enhanced homologous replacement by the incoming DNA, even when the length of genomic DNA homology is reduced.