A gene targeting strategy employing RNA-DNA oligonucleotides (RDO) has been developed to modify single-base mutations in chromosomal DNA. A primary limitation in the application of the RDO technology has been the lack of standardized systems to measure gene conversion in cells in a reproducible manner. A shuttle vector containing the E. coli beta-galactosidase gene with a G > A, inactivating, point mutation was constructed to measure the frequency of gene targeting by RDO. An RDO was shown to correct the point mutation and restore enzymatic activity in mammalian cells and in bacteria transformed with a Hirt extract DNA. An in vitro cell extract system capable of facilitating RDO-mediated correction was also established. These transfection and in vitro systems indicated that the shuttle vector system might be useful for comparing targeting frequency in different cell types and to investigate the mechanism of gene conversion by RDO. Using several different designs of RDO, it was determined that the number of RNA residues in the RNA portion of the chimera and the chemical modification of the hairpin loop were important for improving gene correction by RDO. In addition, it was determined that the replacement of a single mismatch in the DNA containing strand was important for inducing preferential mismatch repair. Two major proteins, a 130 kDA and a 100 kDa, also appear to be important in strand pairing of the target plasmid and its RDO homologue. The applicant proposes to further optimize RDO design and characterize the molecular intermediates involved in this process. The same system will also be used to investigate a rate-limiting step in gene conversion by comparing frequencies among cells containing specific defects in recombination and/or repair. Gene conversion will be measured at the biochemical, genetic, and molecular level utilizing the shuttle vector system already developed to understand the mechanisms involved in RDO-mediated correction and to optimize RDO design.