Cell lineage analysis and mosaic analysis of mutations are important techniques that are used to study the development of many organisms. Unfortunately, the methods employed for such analyses are usually inefficient, technically demanding or labor intensive. In Drosophila, the most common methodology used for the generation of mosaic animals is mitotic recombination, which is induced by X-rays. Although this technique is simple, it has the undesirable characteristics of a low efficiency and a high rate of cell death. Furthermore, although a large number of marker systems has been employed to detect mitotic recombinants, none allows easy identification of clones for all cell types. A system is described here that allows a highly efficient generation of clones with the concomitant expression of an easily detectable cellular marker. This method can be applied to cell lineage and mosaic analysis in Drosophila. The site-specific yeast FLP recombinase, under the control of a heat shock-inducible promoter, efficiently catalyses mitotic recombination specifically at the site of a FLP recombination target (FRT). In this system, recombination fuses the alpha-tubulin promoter to the lacZ gene, allowing transcription of the marker. Recombinant cells and their progeny can, therefore, be detected by standard assays for beta-galactosidase. Of particular importance is the fact that only the cells of interest stain, thus allowing their simple detection in any tissue. We demonstrate that, by intermolecular recombination, we can use FLIP recombinase to generate marked clones efficiently in embryonic, larval and adult tissues. This simple and efficient technique is well suited to cell-lineage analysis and can be easily extended to the generation and detection of mutant clones in mosaic animals.