Transgenic mice have been used to study gene function and regulation by introducing inducible or tissue-specific transgenes. This approach is generally limited to studying gene function in adult mice since ectopic expression of many interesting genes is disease causing or may be lethal to the developing embryo. To extend the utility of the transgenic mouse system to the early stages of embryogenesis, we have developed a two-tiered method of gene regulation to control transgene expression. Our multiplex gene regulatory system (MGR) allows the establishment of transgenic lines that harbor inducible potentially lethal transgenes. These inducible transgenes are activated only when mated to a second transgenic animal. Induction in the MGR system provides a high degree of temporal and spatial control over transgene expression and should be suitable for engineering 'gain of function mutations' for many developmental genes.