Drosophila cells in culture can be transformed by introducing exogenous DNA carrying a selectable marker. Here we report on the fate of plasmids that contain an extended fragment of Drosophila DNA in addition to the selectable marker. A small minority of the resulting transformants appear to arise from homologous recombination at the chromosomal target. However, the majority of the insertions are the products of illegitimate events in the vicinity of the target DNA, and they often cause mutations in the targeted region. The efficiency of this process, its homology dependence, and the clustering of the products define a novel transformation pathway that we call "parahomologous targeting."