We report here homologous recombination (HR)-mediated gene targeting of two different genes in human iPS cells (hiPSCs) and human ES cells (hESCs). HR-mediated correction of a chromosomally integrated mutant GFP reporter gene reaches efficiencies of 0.14%-0.24% in both cell types transfected by donor DNA with plasmids expressing zinc finger nucleases (ZFNs). Engineered ZFNs that induce a sequence-specific double-strand break in the GFP gene enhanced HR-mediated correction by > 1400-fold without detectable alterations in stem cell karyotypes or pluripotency. Efficient HR-mediated insertional mutagenesis was also achieved at the endogenous PIG-A locus, with a > 200-fold enhancement by ZFNs targeted to that gene. Clonal PIG-A null hESCs and iPSCs with normal karyotypes were readily obtained. The phenotypic and biological defects were rescued by PIG-A transgene expression. Our study provides the first demonstration of HR-mediated gene targeting in hiPSCs and shows the power of ZFNs for inducing specific genetic modifications in hiPSCs, as well as hESCs.