The opportunistic fungal pathogen Candida albicans is asexual and diploid. Thus, introduction of recessive mutations requires targeted gene replacement of two alleles to effect expression of a recessive phenotype. This is often performed by recycling of a URA3 marker gene that is flanked by direct repeats of hisG. After targeting to a locus, recombination between the repeats excises URA3 leaving a single copy of hisG in the disrupted allele. The remaining functional allele is targeted in a second transformation with the same URA3 marked construct. Replacement can be highly biased toward one allele. At the PHR1 locus, there was an approximately 50-fold preference for replacement of the disrupted versus the functional allele in a heterozygous mutant. This preference was reduced six- to eightfold when the transforming DNA lacked the hisG repeats. Nonetheless, there remained a sixfold preference for targeting a particular allele of PHR1 and this was evident even in transformations of the parental strain containing two wild-type alleles of PHR1. Both wild-type alleles were cloned and nucleotide sequence comparison revealed 24 heterologies over a 2 kb region. Using restriction site polymorphisms to distinguish alleles, it was observed that transformation with the cloned DNA of allele PHR1-1 preferentially targeted allele 1 of the genome. Transformations with PHR1-2 exhibited the reciprocal specificity. In both these instances, heterology was present in the flanking regions of the transforming DNA. When the transforming DNA was chosen from a region 100% identical in both alleles, alleles 1 and 2 were targeted with equal frequency. It is concluded that sequence heterology between alleles results in an inherent allele specificity in targeted recombination events.