Strategy used to introduce transgenes into a defined genomic locus in ES cells. For convenience the approach can be considered in three steps (boxes). In step1, a cassette containing neomycin phosphotransferase coding sequence (Neo, green) that is expressed from a phosphoglycerate kinase-1 (pgk) promoter (light blue) flanked by loxP elements (red) is targeted to a chosen locus, in this case Hnf3α (yellow), by homologous recombination. Cells containing the Neo cassette are resistant to the pharmacological inhibitor G418. In step 2, sensitivity of the targeted ES cells to G418 is restored by removing the Pgk promoter by transiently introducing a plasmid that expresses Cre recombinase. In step 3, transgenes (dark blue) are introduced to the locus through homologous recombination. The short arm of homology contains a truncated Neo gene (ΔNeo) that lacks phosphotransferase activity that can be expressed from a Pgk promoter. The long arm of homology consists of genomic DNA sequences lying 5' to the intended site of integration (not drawn to scale). Homologous recombination reconstitutes expression of Neo and generates G418 resistant ES cells. The site of transcriptional initiation of Hnf3α is indicted as a black dot with an arrow.