A strategy employing gene trap mutagenesis and site-specific recombination (Cre/loxP) has been used to identify genes that are transiently expressed during early mouse development. Embryonic stem cells expressing a reporter plasmid that codes for neomycin phosphotransferase and Escherichia coli LacZ were infected with a retroviral gene trap vector (U3Cre) carrying coding sequences for Cre recombinase (Cre) in the U3 region. Activation of Cre expression from integrations into active genes resulted in a permanent switching between the two selectable marker genes and consequently the expression of beta-galactosidase (beta-Gal). As a result, clones in which U3Cre had disrupted genes that were only transiently expressed could be selected. Moreover, U3Cre-activating cells acquired a cell autonomous marker that could be traced to cells and tissues of the developing embryo. Thus, when two of the clones with inducible U3Cre integrations were passaged in the germ line, they generated spatial patterns of beta-Gal expression.