Cell lineage analyses trace the hierarchy of cell types derived from a progenitor population. Critical to these analyses is the ability to track reliably all or defined subsets of the clonal descendants of the progenitor population. This necessitates marking the cells with a heritable and cell autonomous marker. Transgenes encoding molecules that can be visualized directly in situ without compromising cell differentiation, such as the reporter, β-galactosidase encoded by lacZ and chloramphenicol acetyltransferase, encoded by the CAT gene are the most widely used. The lacZ can be readily detected using a sensitive histo-chemical assay such that cells in which the β-galactosidase gene is transcrip-tionally active produce a blue stain in tissue sections or in whole mounts (1). Some lineage studies demand the simultaneous detection of the lacZ product and other tissue-specific proteins or transcripts. In this chapter, we discuss the experimental strategies in which the lacZ transgene can be utilized in the analysis of cell lineages, and we detail assays for detecting β-galactosidase by X-gal histochemistry or immunological localization of the enzyme in combination with mRNA in situ hybridization, immunochemistry, and histochemical procedures, such as alkaline phosphatase staining. 1.1. Choosing the Appropriate Transgenic Animals for Lineage Analysis The expression of the lacZ transgene varies according to the nature of the regulatory elements (promoter and enhancer) that drive gene expression, the number of active copies, and the chromosomal domain where the transgene is localized. The choice of transgene is dictated by the specific questions to be addressed. Several examples of transgenes give ubiquitous nonlineage biased expression. For example, in transgenic mice where the lacZ gene is regulated by the hydroxymethylglutaryl coenzyme A (HMG-CoA) reductase promoter, the transgene is expressed in all lineages at high levels during development (2). Similarly, the ROSA-β-geo transgene produced by site-directed mutagenesis (3) and the lacZ reporter driven by rat β-actin promoter (4) also provide ubiquitous tagging of multiple cell lineages. Ubiquitously expressed transgenes provide the most ideal marker for unbiased cell lineage analyses, provided the lineage progenitors or founder cells to be studied can be isolated as a pure cell population. Integration of the transgene into a specific chromosome may be useful in some cases for tracing cell lineages. Transgenes that are expressed in the same pattern as neighboring genes at the site of integration provide a ready marker for any tissue-specific pattern of expression. For example, transgenes integrated into the X chromosome may behave like the endogenous X-linked gene; however, the fact that the expression pattern is due to a transgene, not an endogenous gene, must be taken into account when interpreting the results (5, 6). In female mice that carry the lacZ transgene on only one X chromosome, X-inactivation during embryonic development generates two cell populations, one that expresses the X-linked transgene and another that does not. Since the status of X-inactivation is heritable, descendants of either population are stable for the transgene expression. Several studies on the lineage relationship of cells in tissues, such as the retina, brain, and tongue, have been performed using the mosaicism of transgene expression generated by random X-chromosome inactivation (7–10). Finally, some transgenes display lineage and stage-specific expression through use of a tissue-specific promoter or as a consequence of their unique integration sites. For example, in Wnt1-lacZ transgenic mice, the transgene is regulated by the Wnt1 3′-cis-acting enhancer element, which directs specific expression to the dorsal part of the neural tube and subsequently in the neural crest cells derived from this region (11). Another example is R197 transgenic mice, in which the lacZ gene is expressed principally in the muscle lineage from early organogenesis stages onward as a consequence of its integration site (12). Provided that the expression of the transgene is tissue specific for a defined period of development, such transgenes offer an excellent tool for tracing the differentiation of cell lineages. A prerequisite for using these mice and any other transgenic lines is to establish the pattern of transmission and ascertain the tissue and temporal specificity of transgene expression.