Driven by the needs of functional genomics, DNA engineering by homologous recombination in Escherichia coli has emerged as a major addition to existing technologies. Two alternative approaches, RecA-dependent engineering and ET recombination, allow a wide variety of DNA modifications, including some which are virtually impossible by conventional methods. These approaches do not rely on the presence of suitable restriction sites and can be used to insert, delete or substitute DNA sequences at any desired position on a target molecule. Furthermore, ET recombination can be used for direct subcloning and cloning of DNA sequences from complex mixtures, including bacterial artificial chromosomes and genomic DNA preparations. The strategies reviewed in this article are applicable to modification of DNA molecules of any size, including very large ones, and present powerful new avenues for DNA manipulation in general.