Transgenic mice have been used to explore the role of chromosomal translocations in the genesis of tumors. But none of these efforts has actually involved induction of a translocation in vivo. Here we report the use of Cre recombinase to replicate in vivo the t(8;21) translocation found in human acute myeloid leukemia (AML). As in the human tumors, the murine translocation fuses the genes AML1 and ETO. We used homologous recombination to place loxP sites at loci that were syntenic with the break points for the human translocation. Cre activity was provided in mice by a transgene under the control of the Nestin promoter, or in cultured B cells by infecting with a retroviral vector encoding Cre. In both instances, Cre activity mediated interchromosomal translocations that fused the AML1 and ETO genes. Thus, reciprocal chromosomal translocations that closely resemble rearrangements found in human cancers can be achieved in mice.