Chromosomal inversions are valuable genetic tools for mutagenesis screens, where appropriately marked inversions can be used as balancer chromosomes to recover and maintain mutations in the corresponding chromosomal region. For any inversion to be effective as a balancer, it should exhibit both dominant and recessive visible traits; ideally the recessive trait should be a fully penetrant lethality in which inversion homozygotes die before birth. Unfortunately, most inversions recovered by classical radiation or chemical mutagenesis techniques do not have an overt phenotype in either the heterozygous or the homozygous state. However, they can be modified by relatively simple procedures to make them suitable as an appropriately marked balancer. We have used homologous recombination to modify, in embryonic stem cells, the recessive-lethal In(15)21Rk inversion to endow it with a dominant-visible phenotype. Several ES cell lines were derived from inversion heterozygotes, and a keratin-14 (K14) promoter-driven agouti minigene was introduced onto the inverted chromosome 15 in the ES cells by gene targeting. Mice derived from the targeted ES cells carry the inverted chromosome 15 and, at the same time, exhibit lighter coat color on their ears and tails, making this modified In(1a) 21Rk useful as a balancer for proximal mouse chromosome 15.