The generation of transgenic animals with a gain-of-function mutation is commonly achieved by procedures based on random DNA integration. The resulting transgenic founder lines are unique, not reproducible and have variable expression patterns. In contrast, the targeted integration of transgenes into a predetermined neutral genomic position solves most of the inadequacies of random integration methods. However, homologous recombination (HR) in mouse embryonic stem cells (ESCs) currently requires careful design of the targeting vector and a laborious procedure to identify clones with the correct insertion event. Here, we introduce a feasible strategy that employs a heterozygous double fluorescent reporter ESC line for simple identification of a knock-in HR event via detection of endogenous fluorescence expression. Following positive selection using antibiotics, the system offers a second selection step to identify targeted clones by the loss of one of two fluorescence reporters in lieu of the time consuming Southern blotting and PCR analysis routinely applied in conventional targeting experiments. Moreover, the method allows for the simple detection of chimerism (negating the need for appropriate coat colour combinations) and enables the early detection of germline transmission by fluorescence reporter expression in F1 neonates.