Streptomyces avermitilis is an industrially important soil bacterium known for production of avermectins, which are antiparasitic agents useful in animal health care, agriculture, and treatment of human infections. ku genes play a key role in the non-homologous end-joining pathway for repair of DNA double strand breaks. We identified homologs of eukaryotic ku70 and ku80 genes, termed ku1 and ku2, in S. avermitilis. Mutants with deletion of ku1, ku2, and both genes were constructed and their phenotypic changes were characterized. Deletion of ku genes had no apparent adverse effects on growth, spore formation, or avermectin production. The ku mutants, in comparison to wild-type strain, were slightly more sensitive to the DNA-damaging agent ethyl methanesulfonate, but not to UV exposure or to bleomycin. Gene targeting frequencies by homologous recombination were higher in the ku mutants than in wild-type strain. We conclude that ku-deleted strains will be useful hosts for efficient gene targeting and will facilitate functional analysis of genes in S. avermitilis and other industrially important bacterial strains.