Conditional mutagenesis using Cre/loxP recombination is a powerful tool to investigate genes involved in neural development and function. However, the efficient delivery of biologically active Cre recombinase to neural cells, particularly to postmitotic neurons, represents a limiting factor. In this study, we devised a protocol enabling highly efficient conditional mutagenesis in ESC-derived neural progeny. Using a stepwise in vitro differentiation paradigm, we demonstrate that recombinant cell-permeable Cre protein can be used to efficiently induce recombination at defined stages of neural differentiation. Recombination rates of more than 90% were achieved in multipotent pan-neural and glial precursors derived from the Z/EG reporter mouse ESC line, in which Cre recombination activates enhanced green fluorescent proteinexpression. Recombined precursor cells displayed a normal phenotype and were able to differentiate into neurons and/or glial cells, indicating that Cre treatment has no overt side effects on proliferation and neural differentiation. Our data further demonstrate that recombination via Cre protein transduction is not restricted to dividing cells but can even be applied to postmitotic neurons. The ability to conduct Cre/loxP recombination at defined stages of stem cell differentiation in an expression-independent manner provides new prospects for studying the role of individual genes under stringent temporal control.