We have developed a chemical-inducible, site-specific DNA excision system in transgenic Arabidopsis plants mediated by the Cre/loxP DNA recombination system. Expression of the Cre recombinase was tightly controlled by an estrogen receptor-based fusion transactivator XVE. Upon induction by beta-estradiol, sequences encoding the selectable marker, Cre, and XVE sandwiched by two loxP sites were excised from the Arabidopsis genome, leading to activation of the downstream GFP (green fluorescent protein) reporter gene. Genetic and molecular analyses indicated that the system is tightly controlled, showing high-efficiency inducible DNA excision in all 19 transgenic events tested with either single or multiple T-DNA insertions. The system provides a highly reliable method to generate marker-free transgenic plants after transformation through either organogenesis or somatic embryogenesis.