The function of most vertebrate genes remains unknown or uncertain. Insertional mutagenesis offers one approach to identify and understand the function of these genes. Transposons have been used successfully in lower organisms and plants for insertional mutagenesis, but until activation of the Sleeping Beauty (SB) transposon system, there was no indication of active DNA-based transposons in vertebrates. Investigator-driven insertional mutagenesis in vertebrates has relied on retroviral insertions or selection of low-frequency integration of naked DNA in ES cell lines. We have combined the highly active SB transposon with gene-trapping technology to demonstrate that transposon traps can be used for insertional mutagenesis screens in vertebrates. In our studies about one-fourth of the trap insertions appear to be in transcriptional units, a rate that is commensurate with random integration. We show that gene-traps coupled to a fluorescent protein reporter gene can be used to detect insertions into genes active in specific cells of living zebrafish embryos, supporting use of our transposon traps for high-throughput functional genomic screens in vertebrates. genesis 39:225–233, 2004. © 2004 Wiley-Liss, Inc.