The repeated modification of a genomic locus is a technically demanding but powerful strategy to analyze the function of a particular gene product or the role of cis-regulatory DNA elements in mammalian cells. The initial step is "tagging" a site with a selectable marker which is done by homologous recombination (HR) to modify a known locus or by random integration to study cis-regulatory elements at a reproducibly accessible genomic location. The tag is then used to target the construct of choice during an exchange step. Presented here is a novel technique in which the exchange is independent of HR and does not introduce vector sequences. It relies on our previous studies on the replacement of DNA cassettes by FLP-recombinase, whereby some common limitations can be overcome. To this end, the tag, a hygtk positive/negative selection marker, is integrated into the genome of embryonic stem (ES) cells. This marker is flanked by a wild-type Flp-recognition target (FRT) site on one end and by a modified heterospecific FRT site on the other. Successful Flp-mediated replacement of the hygtk cassette is enriched by ganciclovir (GANC) selection for cells that lack the encoded fusion protein. Thereby, the hygtk gene can be exchanged for virtually any sequence in a single efficient step without the need of introducing a positive selectable marker. The system can hence be used to analyze the function of either a gene product or regulatory sequences in ES cells or the transgenic mice derived thereof.