Functional analysis of genome sequences requires methods for cloning DNA of interest. However, existing methods, such as library cloning and screening, are too demanding or inefficient for high-throughput application to the wealth of genomic data being delivered by massively parallel sequencing. Here we describe direct DNA cloning based on the discovery that the full-length Rac prophage protein RecE and its partner RecT mediate highly efficient linear-linear homologous recombination mechanistically distinct from conventional recombineering mediated by Redαβ from lambda phage or truncated versions of RecET. We directly cloned all ten megasynthetase gene clusters (each 10–52 kb in length) from Photorhabdus luminescens into expression vectors and expressed two of them in a heterologous host to identify the metabolites luminmycin A and luminmide A/B. We also directly cloned cDNAs and exactly defined segments from bacterial artificial chromosomes. Direct cloning with full-length RecE expands the DNA engineering toolbox and will facilitate bioprospecting for natural products.