The bacterial CRISPR/Cas system has proven to be an efficient gene-targeting tool in various organisms. Here we employ CRISPR/Cas for accurate and efficient genome editing in rats. The synthetic chimeric guide RNAs (gRNAs) discriminate a single-nucleotide polymorphism (SNP) difference in rat embryonic fibroblasts, allowing allele-specific genome editing of the dominant phenotype in (F344 × DA)F1 hybrid embryos. Interestingly, the targeted allele, initially assessed by the allele-specific gRNA, is repaired by an interallelic gene conversion between homologous chromosomes. Using single-stranded oligodeoxynucleotides, we recover three recessive phenotypes: the albino phenotype by SNP exchange; the non-agouti phenotype by integration of a 19-bp DNA fragment; and the hooded phenotype by eliminating a 7,098-bp insertional DNA fragment, evolutionary-derived from an endogenous retrovirus. Successful in vivo application of the CRISPR/Cas system confirms its importance as a genetic engineering tool for creating animal models of human diseases and its potential use in gene therapy.