We established a mouse Ltk- cell line that contains within its genome a herpes simplex virus thymidine kinase gene (tk) that had been disrupted by the insertion of the recognition sequence for yeast endonuclease I-SceI. The artificially introduced 18 bp I-SceI recognition sequence was likely a unique sequence in the genome of the mouse cell line. To assess whether an induced double-strand break (DSB) in the genomic tk gene would be repaired preferentially by gene targeting or non-homologous recombination, we electroporated the mouse cell line with endonuclease I-SceI alone, one of two different gene targeting constructs alone, or with I-SceI in conjunction with each of the two targeting constructs. Each targeting construct was, in principle, capable of correcting the defective genomic tk sequence via homologous recombination. tk+ colonies were recovered following electroporation of cells with I-SceI in the presence or absence of a targeting construct. Through the detection of small deletions at the I-SceI recognition sequence in the mouse genome, we present evidence that a specific DSB can be introduced into the genome of a living mammalian cell by yeast endonuclease I-SceI. We further report that a DSB in the genome of a mouse Ltk- cell is repaired preferentially by non-homologous end-joining rather than by targeted homologous recombination with an exogenous donor sequence. The potential utility of this system is discussed.