We have produced strains carrying a synthetic fusion of parts of two vitellogenin genes, vit-2 and vit-6, integrated into the Caenorhabditis elegans genome. In most of the 63 transformant strains, the plasmid sequences are integrated at random locations in the genome. However, in two strains the transgene integrated by homologous recombination into the endogenous vit-2 gene. In both cases the reciprocal exchange between the chromosome and the injected circular plasmid containing a promoter deletion led to switching of the plasmid-borne promoter and the endogenous promoter, with a reduction in vit-2 expression. Thus in nematodes, transforming DNA can integrate by homologous recombination to result in partial inactivation of the chromosomal locus. The simplicity of the event and its reasonably high frequency suggest that gene targeting by homologous recombination should be considered as a method for directed inactivation of C. elegans genes.