Conditional knockout mouse models are powerful tools to examine the biological and molecular function(s) of genes in specific tissues. The general procedure to generate such genetically engineered mouse models consists of three main steps. The first step is to find the appropriate genomic clone of the gene of interest and to design the cloning and Southern blot strategies. The second step is the cloning of the gene-targeting vector with all its essential components including positive and negative selection cassettes and the insertion of LoxP sites. Although conventional methods are still being widely used for DNA cloning, we describe in this book chapter the use of λ Red phage-based homologous recombination in Escherichia coli to capture the genomic DNA of the gene of interest and to assemble the gene-targeting vector. This new method provides several advantages as it does not require the presence of restriction sites within the gene of interest to insert LoxP-flanked DNA fragments. In the final step, the gene-targeting vector is transferred into embryonic stem (ES) cells, and successfully targeted ES cell clones are injected into mouse blastocysts to generate conditional knockout mice.