We have developed a method of specifically modifying the mammalian genome in vivo. This procedure comprises heritable tissue-specific and site-specific DNA recombination as a function of recombinase expression in transgenic mice. Transgenes encoding the bacteriophage P1 Cre recombinase and the loxP-flanked beta-galactosidase gene were used to generate transgenic mice. Genomic DNA from doubly transgenic mice exhibited tissue-specific DNA recombination as a result of Cre expression. Further characterization revealed that this process was highly efficient at distinct chromosomal integration sites. These studies also imply that Cre-mediated recombination provides a heritable marker for mitoses following the loss of Cre expression. This transgene-recombination system permits unique approaches to in vivo studies of gene function within experimentally defined spatial and temporal boundaries.