We examined the ability of an E1, E3-defective adenoviral vector to act as a substrate for homologous recombination with chromosomal DNA by including host chromosomal sequence from the mouse Fgr locus that also contained a selectable marker. After infection of mouse embryonic stem cells, stable integration was selected for neomycin resistance and the efficiency of homologous recombination was evaluated. The adenoviral vector was capable of infecting mouse embryonic stem cells efficiently. Between 30-50% of the input virus reached the nuclei after 24 hours of infection. Surprisingly, even without negative selection, 25-40% of the integration resulted from homologous recombination at m.o.i. 10 and 100, although the absolute efficiency of integration was low. Our results suggest that it is possible to modify the structure of an adenoviral vector to achieve a high gene targeting efficiency, resulting in regulated and long-term expression of an introduced gene.