Retroviruses and their relatives, the LTR-containing retrotransposons, integrate newly replicated cDNA copies of their genomes into the genomes of their hosts using element-encoded integrases. Although target site selection is not well understood for this general class of elements, it is becoming clear that some elements target their integration events to very specific regions of their host genomes. Evidence is accumulating that the yeast retrotransposon Ty1 behaves in this manner. Ty1 is found frequently adjacent to tRNA genes in the yeast genome and experimental evidence implicates these regions as preferred integration sites. To determine the basis for Ty1 targeting, we developed an in vivo integration assay using a Ty1 donor plasmid and a second target plasmid that could be used to measure the relative frequency of Ty1 integration into sequences cloned from various regions of the yeast genome. Targets containing genes transcribed by RNA polymerase III (Pol III) were up to several hundredfold more active as integration targets than "cold" sequences lacking such genes. High-frequency targeting was dependent on Pol III transcription, and integration was "region specific," occurring exclusively upstream of the transcription start sites of these genes. Thus, Ty1 has evolved a powerful targeting mechanism, requiring Pol III transcription to integrate its DNA at very specific locations within the yeast genome.