Pluripotent hematopoietic stem cells have been studied extensively, but the events that occur during their differentiation remain largely uncharted. To develop a system that allows the differentiation of cultured multipotent progenitors by time-lapse fluorescence microscopy, myelomonocytic cells were labeled with green fluorescent protein (GFP) in vivo. This was achieved by knocking the enhanced GFP (EGFP) gene into the murine lysozyme M (lys) locus and using a targeting vector, which contains a neomycin resistant (neo) gene flanked by LoxP sites and "splinked" ends, to increase the frequency of homologous recombination. Analysis of the blood and bone marrow of the lys-EGFP mice revealed that most myelomonocytic cells, especially mature neutrophil granulocytes, were fluorescence-positive, while cells from other lineages were not. Removal of the neo gene through breeding of the mice with the Cre-deleter strain led to an increased fluorescence intensity. Mice with an inactivation of both copies of the lys gene developed normally and were fertile. (Blood. 2000;96:719-726)