Site-specific modification of the chromosomal immunoglobulin locus by gene targeting is a powerful tool in studying the molecular requirements for immunoglobulin gene structure and function and in the production of engineered antibodies. Here, we describe a two step- integration then excision-gene targeting procedure for introducing planned genetic alterations into the chromosomal immunoglobulin locus. The efficiency of gene targeting with an enhancer-trap vector in which an enhancerless neo and HSV-tk gene were inserted into the vector backbone was compared to that of the corresponding enhancer-positive vector. Both insertion vectors also contained homology to the chromosomal immunoglobulin target locus along with the desired genetic alteration. The first step involved insertion of the transferred vector into the target locus by homologous recombination. An approximately 15-fold enrichment in the frequency of vector insertion was obtained with the enhancer-trap compared to the enhancer-positive vector. The majority of targeted cells (75%) contained a single copy of the vector integrated into the chromosomal immunoglobulin locus. The second step involved excision of the integrated vector by intrachromosomal homologous recombination between the duplicated region of homology that removed the integrated vector, neo and tk genes along with one copy of homologous DNA. Vector excision was very efficient generating G418S, FIAU(R) secondary recombinants at the high rate of approximately 10(-3)/cell generation. In the secondary recombinants, the overall structure of the chromosomal immunoglobulin locus was restored with the desired genetic alteration being present in an expected proportion of the cells.