Gene disruption and overexpression play central roles in the analysis of gene function. Homologous recombination is, in principle, the most efficient method of disrupting, modifying, or replacing a target gene. Although homologous integration of exogenous DNA into the genome occurs readily in Saccharomyces cerevisiae, it is rare in many other organisms. We identified and disrupted Neurospora crassa genes homologous to human KU70 and KU80, which encode proteins that function in nonhomologous end-joining of double-stranded DNA breaks. The resulting mutants, named mus-51 and mus-52, showed higher sensitivity to methyl methanesulfonate, ethyl methanesulfonate, and bleomycin than wild type, but not to UV, 4-nitroquinoline 1-oxide, camptothecin, or hydroxyurea. Vegetative growth, conidiation, and ascospore production in homozygous crosses were normal. The frequency of integration of exogenous DNA into homologous sequences of the genome in the KU disruption strains of N. crassa was compared with that in wild type, mei-3, and mus-11. In mei-3 and mus-11, which are defective in homologous recombination, none or few homologous integration events were observed under any conditions. When mtr target DNA with approximately 2-kb 5' and 3' flanking regions was used for transformation of the KU disruption strains, 100% of transformants exhibited integration at the homologous site, compared to 10 to 30% for a wild-type recipient. Similar results were obtained when the ad-3A gene was targeted for disruption. These results indicate that KU disruption strains are efficient recipients for gene targeting.