An efficient method of transgene modulation in fertilized eggs has been developed that uses the Cre/loxP recombination system. Twelve transgenic mouse lines carrying a chicken beta-actin promoter-loxP-chloramphenicol acetyltransferase (CAT) gene-loxP-beta-galactosidase gene construct were produced. After selection of the line showing the highest expression of the CAT gene in a variety of tissues, eggs of this line were injected in the male or female pronucleus with a Cre expression vector placed under the control of the chicken beta-actin promoter and kept in a circular form to avoid genomic integration. This resulted in a transient expression of Cre in the eggs, leading to recombination of the transgene as detected by galactosidase expression and DNA analysis. Recombination was completed before the morula stage with both types of pronuclear injections and occurred with a very high frequency; no mosaicism, no incomplete recombination, and no integration of the Cre sequence were observed in 18 mice born with this modified transgene. The beta-galactosidase gene was expressed in various tissues at levels comparable to those found for the CAT gene in the founder line. This Cre transient expression system should be useful for breeding transgenic lines in which transgene expression leads to sterility or lethality--in particular, for selecting transgenic lines with high expression of a potentially lethal transgene whose full activity is difficult to explore in a conventional transgenic system because of the risk of selecting for transgenic lines carrying only poorly expressed transgenes.