Double-strand break (DSB)-induced homologous recombination (HR) of direct repeats is a powerful means to achieve gene excision, a critical step in genome engineering. In this report we have used an extrachrmosomal reporter system to monitor the impact of different parameters on meganuclease-induced HR in CHO-K1 cells. We found that repeat homology length is critical. Virtually no HR could be detected with a 15-bp duplication, while, with repeats larger than 400 bp, recombination efficiency became less dependent on homology length. The presence of an intervening sequence between the duplications dramatically impairs HR, independent of the cleavage position; by 3 kb of insertion, HR is virtually undetectable. Efficient HR can be restored by positioning cleavage sites at both ends of the intervening sequence, allowing a constant level of excision with up to 10 kb of intervening sequences. Using similar constructs, 2.8-kb inserts could be efficiently removed from several chromosomal loci, illustrating the wide potential of this technology. These results fit current models of direct repeat recombination and identify DSB-induced HR as a powerful tool for gene excision.