We constructed a transposon (transposon assisted gene insertion technology, or TAGIT) that allows the random insertion of gfp (or other genes) into chromosomal loci without disrupting operon structure or regulation. TAGIT is a modified Tn5 transposon that uses Kan(R) to select for insertions on the chromosome or plasmid, beta-galactosidase to identify in-frame gene fusions, and Cre recombinase to excise the kan and lacZ genes in vivo. The resulting gfp insertions maintain target gene reading frame (to the 5' and 3' of gfp) and are integrated at the native chromosomal locus, thereby maintaining native expression signals. Libraries can be screened to identify GFP insertions that maintain target protein function at native expression levels, allowing more trustworthy localization studies. We here use TAGIT to generate a library of GFP insertions in the Escherichia coli lactose repressor (LacI). We identified fully functional GFP insertions and partially functional insertions that bind DNA but fail to repress the lacZ operon. Several of these latter GFP insertions localize to lacO arrays integrated in the E. coli chromosome without producing the elongated cells frequently observed when functional LacI-GFP fusions are used in chromosome tagging experiments. TAGIT thereby faciliates the isolation of fully functional insertions of fluorescent proteins into target proteins expressed from the native chromosomal locus as well as potentially useful partially functional proteins.