The visualization of live cell behaviors operating in situ combined with the power of mouse genetics represents a major step toward understanding the mechanisms regulating embryonic development, homeostasis, and disease progression in mammals. The availability of genetically encoded fluorescent protein reporters, combined with improved optical imaging modalities, have led to advances in our ability to examine cells in vivo. We developed a series of lipid‐modified fluorescent protein fusions that are targeted to and label the secretory pathway and the plasma membrane, and that are amenable for use in mice. Here we report the generation of two strains of mice, each expressing a spectrally distinct lipid‐modified GFP‐variant fluorescent protein fusion. The CAG::GFP‐GPI strain exhibited widespread expression of a glycosylphosphatidylinositol‐tagged green fluorescent protein (GFP) fusion, while the CAG::myr‐Venus strain exhibited widespread expression of a myristoyl‐Venus yellow fluorescent protein fusion. Imaging of live transgenic embryonic stem (ES) cells, either live or fixed embryos and postnatal tissues demonstrated that glycosylphosphatidyl inositol‐ and myristoyl‐tagged GFP‐variant fusion proteins are targeted to and serve as markers of the plasma membrane. Moreover, our data suggest that these two lipid‐modified protein fusions are dynamically targeted both to overlapping as well as distinct lipid‐enriched compartments within cells. These transgenic strains not only represent high‐contrast reporters of cell morphology and plasma membrane dynamics, but also may be used as in vivo sensors of lipid localization. Furthermore, combining these reporters with the study of mouse mutants will be a step forward in understanding the inter‐ and intracellular behaviors underlying morphogenesis in both normal and mutant contexts. genesis 44:202–218, 2006. © 2006 Wiley‐Liss, Inc.