Gene targeting of chromosomal sequences by homologous recombination is a powerful method for gene correction that can eliminate dominant mutations causing genetic disease. In mammalian cells, this process is inefficient and much effort is directed towards improving the targeting frequency of conventional plasmid systems, which is only 10−6.The discovery that recombinant adeno-associated virus (rAAV) can introduce precise, site-specific modification in the mammalian genome with a frequency of 1% constituted a major breakthrough in the gene-targeting field.This review discusses the unique features of the rAAV system that are responsible for the high targeting efficiency as well as its successful application in gene therapy.Along with the ability to infect multiple cell types from several different species, rAAV can introduce different types of modifications with high fidelity in both exogenously introduced target genes and endogenous genes.The single-stranded viral genome with inverted terminal repeats is a distinct feature of rAAV that probably mediates the recognition of the genome by appropriate cellular factors and its ability to recombine with homologous sequences in the host genome.On the basis of current knowledge, we propose a mechanism of homologous recombination of the rAAV with the chromosomal target.Understanding the mechanism of rAAV-mediated targeting will improve our ability to manipulate the cellular pathways governing this phenomenon and broaden the scope for practical applications.