An experimental strategy has been developed for the site-specific alteration of genomic DNA. The approach is based on the observation that oligonucleotides containing complementary RNA/DNA hybrid regions are more active than duplex DNA in homologous pairing reactions in vitro. The chimeric molecules are designed with a homologous targeting sequence comprised of a DNA region flanked by blocks of 2'-O-methyl RNA residues (the chimeric strand), its complementary all-DNA strand, thymidine hairpin caps, a single-strand break, and a double-stranded clamp region. The oligonucleotide can align in perfect register with a genomic target except for the designed single base pair mismatch, which is recognized and corrected by harnessing the cell's endogenous DNA repair system. The mechanism of repair has been studied using mammalian cell-free extracts and bacterial systems and has revealed a mismatch correction pathway distinct from homologous recombination. The chimeric molecules have been demonstrated to be effective in the alteration of single nucleotides in episomal and genomic DNA in cell culture, as well as genomic DNA of cells in situ. This is a potentially powerful strategy for gene repair for the myriad hepatic genetic diseases caused by point mutations.