Genetic approaches that allow lineage tracing are essential to our future understanding of melanocytes and melanoma. To date, the approaches used to label melanocytes in mice have relied on random integration of transgenes driven by the promoters of the Tyrosinase and Dopachrome tautomerase genes, knock-in to the Dopachrome tautomerase locus or knock-in to the Mlana locus in a bacterial artificial chromosome. These strategies result in expression in other tissues such as telencephalon and other cell types such as nerves. Here we used homologous recombination in mouse embryonic stem cells to generate a targeted multicistronic allele of the Pmel locus that drives melanocyte-specific expression of CreERT2, nuclear localised H2B-Cerulean and membrane localised marcks-mKate2 allowing live imaging of melanocytes and activation of other conditional alleles. We combined this allele with R26R-EYFP mice allowing induction of EYFP expression on administration of tamoxifen or its metabolite 4-OHT. The fluorescent proteins H2B-Cerulean and marcks-mKate2 label the cell nucleus and plasma membrane respectively allowing live imaging and FACS isolation of melanoblasts and melanocytes as well as serving to provide an internal control allowing estimation of recombination efficiency after administration of tamoxifen. We demonstrate the utility of the transgene in embryonic and adult tissues.