Precise and efficient genome modifications provide powerful tools for biological studies. Previous CRISPR gene knockout methods in cell lines have relied on frameshifts caused by stochastic insertion/deletion in all alleles. However, this method is inefficient for genes with high copy number due to polyploidy or gene amplification because frameshifts in all alleles can be difficult to generate and detect. Here we describe a homology-directed insertion method to knockout genes in the polyploid Drosophila S2R+ cell line. This protocol allows generation of homozygous mutant cell lines using an insertion cassette which autocatalytically generates insertion mutations in all alleles. Knockout cells generated using this method can be directly identified by PCR without a need for DNA sequencing. This protocol takes 2-3 months and can be applied to other polyploid cell lines or high-copy-number genes.