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Melanocytes are neural crest-derived cells that are responsible for mammalian hair follicle (HF) pigmentation. The Dct-LacZ transgenic mouse is extensively used to study melanocyte biology but lacks conditionally-inducible labelling and fluorescent labelling, enabling specific, viable isolation of melanocytes using fluorescence-activated cell sorting (FACS). Here, we have generated a Tet-off bitransgenic mouse model, Dct-H2BGFP, containing Dct-tTA and TRE-H2BGFP transgenes. Characterization of Dct-H2BGFP mice confirmed a pattern of Dct-H2BGFP expression in melanoblasts, melanocyte stem cells (McSCs), and terminally differentiated melanocytes similar to the expression pattern of previously published mouse models Dct-LacZ and iDct-GFP. GFP expression is regulated by doxycycline. GFP is shown to co-localize with melanocyte label-retaining cells (LRCs) identified through BrdU retention. The GFP-expressing cells identified in vivo in the bulge and the secondary hair germ of telogen HFs of Dct-H2BGFP mice express the melanocyte and melanocyte stem cell markers Dct and Kit. Using Dct-H2BGFP mice, we separated GFP-expressing cells from the telogen HF based on FACS and showed that GFP-expressing cells express high levels of Kit and Dct, and lower levels of HF epithelial keratin genes. We also show that GFP-expressing cells express high levels of the melanocyte differentiation genes Tyr, Tyrp1, and Pmel17, further substantiating their identity within the melanocyte lineage. Thus, Dct-H2BGFP mice are not only useful for the in vivo identification of melanocytic cells, but also for isolating them viably and studying their molecular and biological properties.