Targeted insertion of a plasmid by homologous recombination was demonstrated in zebrafish ES cell cultures. Two selection strategies were used to isolate ES cell colonies that contained targeted plasmid insertions in either the no tail or myostatin I gene. One selection strategy involved the manual isolation of targeted cell colonies that were identified by the loss of fluorescent protein gene expression. A second strategy used the diphtheria toxin A-chain gene in a positive-negative selection approach. Homologous recombination was confirmed by PCR, sequence and Southern blot analysis and colonies isolated using both selection methods were expanded and maintained for multiple passages. The results demonstrate that zebrafish ES cells have potential for use in a cell-mediated gene targeting approach.