Studying gene function in the post-genome era requires methods to localize and inactivate proteins in a standardized fashion in model organisms. While genome-wide gene disruption and over-expression efforts are well on their way to vastly expand the repertoire of Drosophila tools, a complementary method to efficiently and quickly tag proteins expressed under endogenous control does not exist for fruit flies. Here, we describe the development of an efficient procedure to generate protein fusions at either terminus in an endogenous genomic context using recombineering. We demonstrate that the fluorescent protein tagged constructs, expressed under the proper control of regulatory elements, can rescue the respective mutations and enable the detection of proteins in vivo. Furthermore, we also adapted our method for use of the tetracysteine tag that tightly binds the fluorescent membrane-permeable FlAsH ligand. This technology allows us to acutely inactivate any tagged protein expressed under native control using fluorescein-assisted light inactivation and we provide proof of concept by demonstrating that acute loss of clathrin heavy chain function in the fly eye leads to synaptic transmission defects in photoreceptors. Our tagging technology is efficient and versatile, adaptable to any tag desired and paves the way to genome-wide gene tagging in Drosophila.