The introduction of engineered site-specific DNA endonucleases has brought precise genome editing in many model organisms and human cells into the realm of possibility. In zebrafish, loss-of-function alleles have been successfully produced; however, germ line transmission of functional targeted knock-ins of protein tags or of SNP exchanges have not been reported. Here we show by phenotypic rescue that the CRISPR/Cas system can be used to target and repair a premature stop codon at the albino (alb) locus in zebrafish with high efficiency and precision. Using circular donor DNA containing CRISPR target sites we obtain close to 50% of larvae with precise homology-directed repair of the alb(b4) mutation, a small fraction of which transmitted the repaired allele in the germ line to the next generation (3/28 adult fish). The in vivo demonstration of germ line transmission of a precise SNP exchange in zebrafish underscores its suitability as a model for genetic research.