A goal of cystic fibrosis (CF) gene therapy is correction of the mutant CF transmembrane conductance regulator (CFTR) gene with wild-type (wt) DNA sequences to restore normal CFTR protein and function. Experiments with wtCFTR cDNA expression vectors have shown that the Cl ion transport phenotype associated with CF can be corrected to resemble that in normal cells. An alternative to cDNA-based gene therapy strategies is one that corrects endogenous mutant sequences by targeted replacement with the wt homologue. To test whether such a strategy was feasible, a small fragment homologous replacement (SFHR) strategy was used to replace specific genomic sequences in human epithelial cells. Small fragments of genomic wtCFTR DNA were transfected into transformed CF epithelial cells. Replacement by exogenous CFTR DNA at the appropriate genomic locus and its expression as mRNA was indicated by: (1) allele-specific polymerase chain reaction (PCR) amplification of genomic DNA and mRNA-derived cDNA; and (2) hybridization of PCR products with allele-specific probes. In addition, the functional activity of CFTR protein was determined by whole cell patch clamp. Southern hybridization and patch clamp analyses suggested that approximately 1 in 100 CF cells underwent a homologous replacement event that resulted in intact Cl transport.