Gene targeting in mouse embryonic stem (ES) cells can be used to generate single gene mutations or defined multi-megabase chromosomal rearrangements when applied with the Cre- loxP recombination system. While single knockouts are essential for uncovering functions of cloned genes, chromosomal rearrangements are great genetic tools for mapping, mutagenesis screens and functional genomics. The conventional approach to generate mice with targeted alterations of the genome requires extensive molecular cloning to build targeting vectors and DNA-based genotyping for stock maintenance. Here we describe the design and construction of a two-library system to facilitate high throughput gene targeting and chromo-somal engineering. The unique feature of these libraries is that once a clone is isolated, it is essentially ready to be used for insertional targeting in ES cells. The two libraries each bear a complementary set of genetic markers tailored so that the vector can be used for Cre- loxP -based chromosome engineering as well as single knockouts. By incorporating mouse coat color markers into the vectors, we illustrate a widely applicable method for stock maintenance of ES cell-derived mice with single gene knockouts or more extensive chromosomal rearrangements.