Recombination of an insertion vector into its chromosomal homologue is a conservative event in that both the chromosomal and the vector sequences are preserved. However, gene conversion may accompany homologous recombination of an insertion vector. To examine gene conversion in more detail we have determined the targeting frequencies and the structure of the recombinant alleles generated with a series of vectors which target the hprt gene in embryonic stem cells. We demonstrate that gene conversion of the introduced mutation does not significantly limit homologous recombination and that gene conversion occurs without a sequence specific bias for five different mutations. The frequency of the loss of a vector mutation and the gain of a chromosomal sequence is inversely proportional to the distance between the vector mutation and the double-strand break. The loss of a chromosomal sequence and the gain of a vector mutation occurs at a low frequency.