Site-specific DNA recombinases from bacteriophage and yeasts have been developed as novel tools for genome engineering both in prokaryotes and eukaryotes. The 38kDa Cre protein efficiently produces both inter- and intramolecular recombination between specific 34bp sites called loxP. We report here the in vivo use of Cre recombinase to manipulate the genome of the protozoan parasite Toxoplasma gondii. Cre catalyzes the precise removal of transgenes from T. gondii genome when flanked by two directly repeated loxP sites. The efficiency of excision has been determined using LacZ as reporter and indicates that it can easily be applied to the removal of undesired sequences such as selectable marker genes and to the determination of gene essentiality. We have also shown that the reversibility of the recombination reaction catalyzed by Cre offers the possibility to target site-specific integration of a loxP-containing vector in a chromosomally placed loxP target in the parasite. In mammalian systems, the Cre recombinase can be regulated by hormone and is used for inducible gene targeting. In T. gondii, fusions between Cre recombinase and the hormone-binding domain of steroids are constitutively active, hampering the utilization of this mode of post-translational regulation as inducible gene expression system.