Modified single-stranded DNA oligonucleotides can direct nucleotide exchange in Saccharomyces cerevisiae. Point and frameshift mutations are corrected in a reaction catalyzed by cellular enzymes involved in various DNA repair processes. The present model centers on the annealing of the vector to one strand of the helix, followed by the correction of the designated base. The choice of which strand to target is a reaction parameter that can be controlled, so here we investigate the properties of strand bias in targeted gene repair. An in vivo system has been established in which a plasmid containing an actively transcribed, but mutated, hygromycin-enhanced green fluorescent protein fusion gene is targeted for repair and upon conversion will confer hygromycin resistance on the cell. Overall transcriptional activity has a positive influence on the reaction, elevating the frequency. If the targeting vector is synthesized so that it directs nucleotide repair on the nontranscribed strand, the level of gene repair is higher than if the template strand is targeted. We provide data showing that the targeting vector can be displaced from the template strand by an active T7 phage RNA polymerase. The strand bias is not influenced by which strand serves as the leading or lagging strand during DNA synthesis. These results may provide an explanation for the enhancement of gene repair observed when the nontemplate strand is targeted.