The type II clustered regularly interspaced short palindromic repeats (CRISPR)/CRISPR-associated (Cas) system has emerged recently as a powerful method to manipulate the genomes of various organisms. Here, we report a toolbox for high-efficiency genome engineering of Drosophila melanogaster consisting of transgenic Cas9 lines and versatile guide RNA (gRNA) expression plasmids. Systematic evaluation reveals Cas9 lines with ubiquitous or germ-line-restricted patterns of activity. We also demonstrate differential activity of the same gRNA expressed from different U6 snRNA promoters, with the previously untested U6:3 promoter giving the most potent effect. An appropriate combination of Cas9 and gRNA allows targeting of essential and nonessential genes with transmission rates ranging from 25-100%. We also demonstrate that our optimized CRISPR/Cas tools can be used for offset nicking-based mutagenesis. Furthermore, in combination with oligonucleotide or long double-stranded donor templates, our reagents allow precise genome editing by homology-directed repair with rates that make selection markers unnecessary. Last, we demonstrate a novel application of CRISPR/Cas-mediated technology in revealing loss-of-function phenotypes in somatic cells following efficient biallelic targeting by Cas9 expressed in a ubiquitous or tissue-restricted manner. Our CRISPR/Cas tools will facilitate the rapid evaluation of mutant phenotypes of specific genes and the precise modification of the genome with single-nucleotide precision. Our results also pave the way for high-throughput genetic screening with CRISPR/Cas.