The ability to create targeted mutations in the mouse will have an impact on many areas of research in mammalian biology. Mutations are generated in embryonic stem (ES) cells by homologous recombination between exogenously added DNA and the endogenous chromosomal sequences. These cells are then used to generate chimeric intermediates that pass the mutant allele through the germ line, initiating a strain of mice that carry the desired mutation. This review focuses on the selection of a starting ES cell line, introduction of DNA into ES cells, construction of gene targeting vectors, and selection/enrichment schemes for the isolation of targeted cell lines. The generation of mice that carry the targeted allele is briefly outlined.