Loss of function mouse models comprise knock‐out mice, where a gene is deleted in the germline, and conditional knock‐out mice with somatic deletion of a floxed allele in defined tissues. Both types of mice are used for comprehensive studies of gene functions in vivo. Here, we describe a simple method for simultaneous generation of mice with conditional or knock‐out alleles for the transcription factor fra‐2 (Fos‐related antigen 2) using a single embryonic stem (ES) cell clone. ES cells with a floxed fra‐2 allele were transiently transfected with a Cre‐recombinase expression plasmid and plated at low density. Most of the resulting ES cell colonies consisted of a mixture of cells that have either retained or lost the conditional allele. We demonstrate that these mixed ES cell clones can be directly used for generation of chimeras that give rise to offspring with conditional or knock‐out alleles simultaneously. This strategy shortens the time and reduces the number of germline transmission events to generate genetically modified mice. genesis 45:447–451, 2007. © 2007 Wiley‐Liss, Inc.