Efficient methods are needed for the precise genetic manipulation of diploid human cells, in which cellular senescence and low conventional gene targeting rates limit experimental and therapeutic options. We have shown previously that linear, single-stranded DNA vectors based on adeno-associated virus (AAV) could accurately introduce small (<20 bp) genetic modifications into homologous human chromosomal sequences. Here we have used AAV vectors to introduce large (>1 kb) functional transgene cassettes into the hypoxanthine phosphoribosyl transferase (HPRT) and Type I collagen (COL1A1) loci in normal human fibroblasts. The transgene cassettes are inserted at high frequencies (1% of the total cell population under optimal conditions) and without secondary mutations. Selection for the inserted transgene cassette can be used to enrich for targeting events, such that >70% of surviving cells have undergone gene targeting with an appropriately designed vector. This approach should prove useful both for functional genomic analysis in diploid human cells and for therapeutic gene targeting.