We used a recently developed method to produce mutant alleles of five endogenous Drosophila genes, including the homolog of the p53 tumor suppressor. Transgenic expression of the FLP site-specific recombinase and the I-SceI endonuclease generates extrachromosomal linear DNA molecules in vivo. These molecules undergo homologous recombination with the corresponding chromosomal locus to generate targeted alterations of the host genome. The results address several questions about the general utility of this technique. We show that genes not near telomeres can be efficiently targeted; that no knowledge of the mutant phenotype is needed for targeting; and that insertional mutations and allelic substitutions can be easily produced.