Genome engineering through homologous recombination (HR) is a powerful instrument for studying biological pathways or creating treatment options for genetic disorders. In mammalian cells HR is rare but the creation of targeted DNA double-strand breaks stimulates HR significantly. Here, we present a method to generate, evaluate, and optimize rationally designed endonucleases that promote HR. The DNA-binding domains were synthesized by assembling predefined zinc-finger modules selected by phage display. Attachment of a transcriptional activation domain allowed assessment of DNA binding in reporter assays, while fusion with an endonuclease domain created custom nucleases that were tested for their ability to stimulate HR in episomal and chromosomal gene repair assays. We demonstrate that specificity, expression kinetics, and protein design are crucial parameters for efficient gene repair and that our two-step assay allows one to go quickly from design to testing to successful employment of the custom nucleases in human cells.