We have applied the CRISPR/Cas9 system to Drosophila S2 cells to generate targeted genetic mutations in more than 85% of alleles. By targeting a constitutive exon of the AGO1 gene, we demonstrate homozygous mutation in up to 82% of cells, thereby allowing the study of genetic knockouts in a Drosophila cell line for the first time. We have shown that homologous gene targeting is possible at 1-4% efficiency using this system, allowing for the construction of defined insertions and deletions.