FIGURE 1 Transgenic mice are engineered by insertion of a targeting vector into embryonic stem cells. The vector contains a selectable marker, X, and the desired chromosomal alteration (such as a lox site to be introduced) sandwiched between two DNA segments complementary to the chromosomal site where the alteration is to be integrated. These chromosomal sequences can direct homologous recombination. A second selectable marker, Y, is included in the cassette, outside these homologous sequences, and is generally introduced to the chromosome only if the DNA is integrated at an incorrect (nonhomologous) chromosomal site. The targeted cells are subjected to selection in vitro, using drugs to select “for” cells that have selectable marker X and “against” cells that also have selectable marker Y. The surviving cells are then introduced into an early-