A novel approach to oligonucleotide-mediated, site-directed in vitro mutagenesis is described that allows for the efficient generation of sequence modifications on double-stranded substrates without the need for subcloning into special vectors. Site-directed deletions as well as point mutations were introduced into the genes encoding human tissue plasminogen activator (tPA) and the Bacillus amyloliquefaciens alpha-amylase gene using lambda exonuclease to enzymatically degrade DNA 5' to 3' in order to generate a single-stranded template in the immediate vicinity of the oligonucleotide annealing site. The mutagenizing oligonucleotide, used both to redefine the 5' end of the molecule and to introduce base changes, was annealed to the single-stranded target sequence producing substrates for both the exonucleolytic and polymerizing activities of DNA polymerase Klenow fragment. Resolution of the resultant heteroduplex by Escherichia coli resulted in the generation of the desired deletion point mutation in the tPA sequence with an efficiency of 38% as determined by differential hybridization and 32% as determined by restriction analysis, with final verification by sequence data. As a further test of the method, two point mutations were introduced simultaneously with the desired sequence deletion into the Bacillus amyloliquefaciens alpha-amylase gene, generating a Pst I restriction site at the junction of the DNA encoding the signal peptide and the mature enzyme with an efficiency of 0.3% as determined by sequence data of hybridization-positive/Pst I-positive clones. The lambda exonuclease procedure is designed for use in situations where site-directed deletions must be introduced efficiently alone or with single or double point mutations.