Immune-deficient Rag2^−/− mice were used as nuclear donors for transfer into enucleated oocytes, and the resulting blastocysts were cultured to isolate an isogenic embryonic stem cell line. One of the mutated alleles in the Rag2^−/− ES cells was repaired by homologous recombination, thereby restoring normal Rag2 gene structure. Mutant mice were treated with the repaired ES cells in two ways. (1) Immune-competent mice were generated from the repaired ES cells by tetraploid embryo complementation and were used as bone marrow donors for transplantation. (2) Hematopoietic precursors were derived by in vitro differentiation from the repaired ES cells and engrafted into mutant mice. Mature myeloid and lymphoid cells as well as immunoglobulins became detectable 3–4 weeks after transplantation. Our results establish a paradigm for the treatment of a genetic disorder by combining therapeutic cloning with gene therapy.