The possibility to make precise modifications to the genome at high frequency holds tremendous potential for biotechnology, conventional drug development and gene therapy. Homologous recombination is a powerful method for introducing such modifications in organisms such as mice. However, in mammals and plants, the frequency of gene modification by homologous recombination is quite low, precluding the therapeutic use of this methodology. In the past few years, tremendous progress has been made in overcoming one of primary barriers to efficient recombination, namely the introduction of a targeted double-strand break near the intended recombination site. This review will discuss the advances in engineering custom zinc-finger nucleases and their application in stimulating homologous recombination in higher eukaryotic cells at efficiencies approaching 1 in 2 cells.