Gene targeting is widely used for the precise manipulation of genes. However, in the model organism Caenorhabditis elegans non-transposon mediated gene targeting remains laborious, and as a result has not been widely used. One obstacle to the wider use of this approach is the difficulty of identifying homologous recombination events amongst non-specific events. To improve gene targeting in C. elegans, we used a counter-selection approach to reduce the number of false positives; this involved using unc-119 as a positive-selection marker and GFP as a counter-selection marker which is lost during homologous recombination. This method of gene targeting allows straightforward screening for homologous events using a dissecting microscope equipped for fluorescence. In addition, to improve the final engineered product, we utilised Flp recombinase to remove the unc-119 selection marker, in somatic cells, producing clean knockouts in these cells. Using this strategy we have produced a knockout of the plc-4 gene, which encodes phospholipase C-delta in C. elegans, and demonstrated that conditional gene knockout is feasible in C. elegans.