Recent advances in genome engineering technologies based on the CRISPR-associated RNA-guided endonuclease Cas9 are enabling the systematic interrogation of genome function. Analogous to the search function in modern word processors, Cas9 can be guided to specific locations within complex genomes by a short RNA search string. Using this system, DNA sequences within the endogenous genome and their functional outputs are now easily edited or modulated in virtually any organism of choice. Cas9-mediated genetic perturbation is simple and scalable, empowering researchers to elucidate the functional organization of the genome at the systems level and establish causal linkages between genetic variations and biological phenotypes. To facilitate successful and specific Cas9 targeting, we first optimize the guide RNAs (sgRNA) to significantly enhance gene editing efficiency and consistency. We also systematically characterize Cas9 targeting specificity in human cells to inform the selection of target sites and avoid off-target mutagenesis. We find that SpCas9 tolerates mismatches between guide RNA and target DNA at different positions in a sequence-dependent manner, sensitive to the number, position and distribution of mismatches. We also show that Cas9-mediated cleavage is unaffected by DNA methylation and that the dosage of Cas9 and sgRNA can be titrated to minimize off-target modification. Additionally, we provide a web-based software tool to guide the selection and validation of target sequences as well as off-target analyses. We next demonstrate that Cas9 nickase mutants can be used with paired guide RNAs to introduce targeted double-strand breaks. Because individual nicks in the genome are repaired with high fidelity, simultaneous nicking via appropriately offset guide RNAs can reduce off-target activity by over 1,500-fold in human cells. In collaboration with researchers at the University of Tokyo, we further identified a PAM-interacting domain of the Cas9 nuclease that dictates Cas9 target recognition specificity. Finally, we present protocols that provide experimentally derived guidelines for the selection of target sites, evaluation of cleavage efficiency and analysis of off-target activity. Beginning with target design, gene modifications can be achieved within as little as 1-2 weeks. Taken together, this work enables a variety of genome engineering applications from basic biology to biotechnology and medicine.