Gene targeting in large animals has the potential to be useful in medicine as well as in agriculture. Previously, we reported the first successful targeting of the bovine alpha1,3-galactosyltransferase (alpha1,3GT) gene and establishment of a heterozygous knockout cell line. In this report, we generated both heterozygous and homozygous knockout bovine cell lines, and alpha1,3GT-gene knockout cattle. alpha1,3GT gene-disruption was accomplished using primary fetal fibroblasts with a single targeting vector, a promoter-less positive selection vector containing IRES (internal ribosome entry site)-antibiotic-resistance gene (neo) cassette and loxP sequences. At each step in establishing heterozygous and homozygous knockout cell lines, the antibiotic-resistance gene cassette in the targeted allele was removed by a Cre-loxP recombination system that utilizes an adenovirus with transient Cre recombinase expression. A nuclear transfer was performed using alpha1,3GT fetal fibroblasts, and one alpha1,3GT knockout calf was generated but died shortly after birth (day 287). Necropsy revealed normal morphology in all organs. The calf weighed 22.3 kg at birth and this value is within the normal range. The alpha1,3GT knockout- and antibiotic-resistance gene free (alpha1,3GT(-/-)neo-) cells could be cloned normally. Thus, cloned cattle from alpha1,3GT(-/-) neo- cells are potentially safer for human use. Additionally, our strategy is faster and more economical than backcrossing to produce homozygous knockouts. This method should be useful for future production of knockouts of multiple genes in livestock.