This paper describes a rapid method of constructing homologous recombinant baculovirus in E. coli with PCR-amplified fragments. By using this method, the traditional steps of constructing transfer vector are omitted. The method is based on phage λ red system which can promote the recombination between the homologous fragments with the length above 36 bp. Taking HaSNPV as an example, this paper describes the rapid recombination process by using chloramphenicol resistance gene (CmR) to replace orf135 in HaSNPV genome. A pair of primers with length of 60 bp was synthesized, in which 40 bp was homologous to the each end sequence of orf135, and the rest 20 bp was homologous to the each end sequence of CmR. By using these primers, a linear fragment containing the complete CmR gene between 40 bp of homologous arms of orf135 was generated by PCR with the plasmid pKD3 which contains CmR as the template. By transforming the linear fragment into the E. coli containing the bacterial artificial chromosome of HaSNPV and with the help of a plasmid expressing λ recombinase, the recombinants on which the homologue replacement had taken place were selected by chloramphenicol resistance. This method greatly shortens the process of constructing recombinant baculovirus since the process was performed in E. coli and does not need to construct transfer vectors. It can be further used for gene replacement and gene deletion of other large viral genomes.