Nucleases that cleave unique genomic sequences in living cells can be used for targeted gene editing and mutagenesis. Here we develop a strategy for generating such reagents based on transcription activator-like effector (TALE) proteins from Xanthomonas. We identify TALE truncation variants that efficiently cleave DNA when linked to the catalytic domain of FokI and use these nucleases to generate discrete edits or small deletions within endogenous human NTF3 and CCR5 genes at efficiencies of up to 25%. We further show that designed TALEs can regulate endogenous mammalian genes. These studies demonstrate the effective application of designed TALE transcription factors and nucleases for the targeted regulation and modification of endogenous genes.