Site-specific recombination (SSR) by Cre recombinase and its target sequence, loxP, is a valuable tool in genetic analysis of gene function. Recently, several studies reported successful application of Cre fusion protein containing protein transduction peptide for inducing gene modification in various mammalian cells including ES cell as well as in the whole animal. In this study, we show that a short incubation of preimplantation mouse embryos with purified cell-permeable Cre fusion protein results in efficient SSR. X-Gal staining of preimplantation embryos, heterozygous for Gtrosa26(tm1Sor), revealed that treatment of 1-cell or 2-cell embryos with 3microM of Cre fusion protein for 2h leads to Cre-mediated excision in 70-85% of embryos. We have examined the effect of the concentration of the Cre fusion protein and the duration of the treatment on embryonic development, established a condition for full term development and survival to adulthood, and demonstrated the germ line transmission of excised Gtrosa26 allele. Potential applications and advantages of the highly efficient technique described here are discussed.