Here we describe the generation of a double-fluorescent Cre/loxP indicator system. This protocol involves (i) all cloning steps to generate the plasmid vector (3-5 months); (ii) a guide to prepare high-efficiency transformation competent E. coli; (iii) generation of double-fluorescent reporter cell lines (3-4 weeks); and (iv) the functional testing of the indicator cell lines by application of cell-permeable Cre recombinase. The indicator is designed to monitor recombination events by switching the fluorescence light from red to green. The red fluorescence, indicating the nonrecombined state, is accompanied by the expression of a resistance gene against the antibiotic blasticidin. Appearance of green fluorescence concomitantly with the activation of puromycin-acetyltransferase monitors the recombination of the indicator construct by the Cre recombinase. In summary, we have developed a plasmid vector allowing a fast, stable and straightforward generation of transgenic clones. The expression of red fluorescent protein enables the selection of positive clones upon transfection and significantly shortens the time for identification of stable clones. This feature and the option to select for recombined cells by puromycin application are advantages compared with other alternative methods. Moreover, we developed a method utilizing cell-permeable Cre protein to validate the transgenic clones. Ultimately, this powerful methodology facilitates Cre/loxP-based applications such as cell lineage tracking or monitoring of cell fusion.