Experimental approaches for deciphering the function of human genes rely heavily on our ability to generate mutations in model organisms such as the mouse. However, because recessive mutations are masked by the wild-type allele in the diploid context, conventional mutagenesis and screening is often laborious and costly. Chromosome engineering combines the power of gene targeting in embryonic stem (ES) cells with Cre--loxP technology to create mice that are functionally haploid in discrete portions of the genome. Chromosome deletions, duplications and inversions can be tagged with visible markers, facilitating strain maintenance. These approaches allow for more refined mutagenesis screens that will greatly accelerate functional mouse genomics and generate mammalian models for developmental processes and cancer.