DNA double-strand breaks enhance homologous recombination in cells and have been exploited for targeted genome editing through use of engineered endonucleases. Here we report the creation and initial characterization of a group of rare-cutting, site-specific DNA nucleases produced by fusion of the restriction enzyme FokI endonuclease domain (FN) with the high-specificity DNA-binding domains of AvrXa7 and PthXo1. AvrXa7 and PthXo1 are members of the transcription activator-like (TAL) effector family whose central repeat units dictate target DNA recognition and can be modularly constructed to create novel DNA specificity. The hybrid FN-AvrXa7, AvrXa7-FN and PthXo1-FN proteins retain both recognition specificity for their target DNA (a 26 bp sequence for AvrXa7 and 24 bp for PthXo1) and the double-stranded DNA cleaving activity of FokI and, thus, are called TAL nucleases (TALNs). With all three TALNs, DNA is cleaved adjacent to the TAL-binding site under optimal conditions in vitro. When expressed in yeast, the TALNs promote DNA homologous recombination of a LacZ gene containing paired AvrXa7 or asymmetric AvrXa7/PthXo1 target sequences. Our results demonstrate the feasibility of creating a tool box of novel TALNs with potential for targeted genome modification in organisms lacking facile mechanisms for targeted gene knockout and homologous recombination.