The ability of human embryonic stem cells and induced pluripotent stem cells to differentiate into all adult cell types greatly facilitates the study of human development, disease pathogenesis, and the generation of screening systems to identify novel therapeutic agents. Autologous cell therapies based on patient-derived induced pluripotent stem cells also hold great promise for the treatment and correction of many inherited and acquired diseases. The full potential of human pluripotent stem cells can be unleashed by genetically modifying a chosen locus with minimal impact on the remaining genome, which can be achieved by targeting genes by homologous recombination. This chapter will describe a protocol for gene modification of pluripotent stem cells by homologous recombination and several methods for the screening and identification of successfully modified clones.