This unit describes a series of technical procedures to form clonal human embryonic stem cell (hESC) lines that are genetically modified by homologous recombination. To develop a reporter knock-in hESC line, a vector is configured to contain a reporter gene adjacent to a positive selection cassette. These core elements are flanked by homologous sequences that, following electroporation into hESCs, promote the integration of the vector into the appropriate genomic locus. The positive selection cassette facilitates the enrichment and isolation of genetically modified hESC colonies that are then screened by PCR to identify correctly targeted lines. The selection cassette, flanked by loxP sites, is subsequently excised from the positively targeted hESCs via the transient expression of Cre recombinase. This is necessary because the continued presence of the cassette may interfere with the regulation of the reporter or neighboring genes. Finally, these genetically modified hESCs are clonally isolated using single-cell deposition flow cytometry. Reporter knock-in hESC lines are valuable tools that allow easy and rapid identification and isolation of specific hESC derivatives.