In recent years, there has been an increasing interest in the exploitation of microalgae in industrial biotechnology. Potentially, these phototrophic eukaryotes could be used for the low-cost synthesis of valuable recombinant products such as bioactive metabolites and therapeutic proteins. The algal chloroplast in particular represents an attractive target for such genetic engineering, both because it houses major metabolic pathways and because foreign genes can be targeted to specific loci within the chloroplast genome, resulting in high-level, stable expression. However, routine methods for chloroplast genetic engineering are currently available only for one species—Chlamydomonas reinhardtii—and even here, there are limitations to the existing technology, including the need for an expensive biolistic device for DNA delivery, the lack of robust expression vectors, and the undesirable use of antibiotic resistance markers. Here, we describe a new strain and vectors for targeted insertion of transgenes into a neutral chloroplast locus that (i) allow scar-less fusion of a transgenic coding sequence to the promoter/5′UTR element of the highly expressed endogenous genes psaA or atpA, (ii) employ the endogenous gene psbH as an effective but benign selectable marker, and (iii) ensure the successful integration of the transgene construct in all transformant lines. Transformation is achieved by a simple and cheap method of agitation of a DNA/cell suspension with glass beads, with selection based on the phototrophic rescue of a cell wall-deficient ΔpsbH strain. We demonstrate the utility of these tools in the creation of a transgenic line that produces high levels of functional human growth hormone.