Previous studies demonstrated that in somatic plant cells, homologous recombination (HR) is several orders of magnitude less efficient than nonhomologous end joining and that HR is little used for genomic double-strand break (DSB) repair. Here, we provide evidence that if genomic DSBs are induced in close proximity to homologous repeats, they can be repaired in up to one-third of cases by HR in transgenic tobacco. Our findings are relevant for the evolution of plant genomes because they indicate that sequences containing direct repeats such as retroelements might be less stable in plants that harbor active mobile elements than anticipated previously. Furthermore, our experimental setup enabled us to demonstrate that transgenic sequences flanked by sites of a rare cutting restriction enzyme can be excised efficiently from the genome of a higher eukaryote by HR as well as by nonhomologous end joining. This makes DSB-induced recombination an attractive alternative to the currently applied sequence-specific recombination systems used for genome manipulations, such as marker gene excision.