With only two different cell types, the haploid green alga Volvox represents the simplest multicellular model system. To facilitate genetic investigations in this organism, the occurrence of homologous recombination events was investigated with the intent of developing methods for gene replacement and gene disruption. First, homologous recombination between two plasmids was demonstrated by using overlapping nonfunctional fragments of a recombinant arylsulfatase gene (tubulin promoter/arylsulfatase gene). After bombardment of Volvox reproductive cells with DNA-coated gold microprojectiles, transformants expressing arylsulfatase constitutively were recovered, indicating the presence of the machinery for homologous recombination in Volvox. Second, a well characterized loss-of-function mutation in the nuclear nitrate reductase gene (nitA) with a single G --> A nucleotide exchange in a 5'-splice site was chosen as a target for gene replacement. Gene replacement by homologous recombination was observed with a reasonably high frequency only if the replacement vector containing parts of the functional nitrate reductase gene contained only a few nucleotide exchanges. The ratio of homologous to random integration events ranged between 1:10 and 1:50, i.e., homologous recombination occurs frequently enough in Volvox to apply the powerful tool of gene disruption for functional studies of novel genes.