Sequential gene targeting was used to introduce point mutations into one alpha 2 isoform Na,K-ATPase homolog in mouse embryonic stem (ES) cells. In the first round of targeted replacement, the gene was tagged with selectable markers by insertion of a Neor/HSV-tk gene cassette, and this event was selected for by gain of neomycin (G418) resistance. In the second targeted replacement event, the tagged genomic sequence was exchanged with a vector consisting of homologous genomic sequences carrying five site-directed nucleotide substitutions. Embryonic stem cell clones modified by exchange with the mutation vector were selected for loss of the HSV-tk gene by resistance to ganciclovir. Candidate clones were further screened and identified by polymerase chain reaction and Southern blot analysis. By this strategy, the endogenous alpha 2 isoform Na,K-ATPase gene was altered to encode two other amino acids so that the enzyme is resistant to inhibition by cardiac glycosides while maintaining its transmembrane ion-pumping function. Since the initial tagging event and the subsequent mutation-exchange event are independent of one another, a tagged cell line can be used to generate a variety of mutant lines by exchange with various mutation vectors at the tagged locus. This method should be useful for testing specific mutations introduced into the genomes of tissue culture cells and animals and for developing animal models encompassing the mutational variability of known genetic disorders.