We developed a functional lineage tracing tool termed CaTCH (CRISPRa tracing of clones in heterogeneous cell populations). CaTCH combines precise clonal tracing of millions of cells with the ability to retrospectively isolate founding clones alive before and during selection, allowing functional experiments. Using CaTCH, we captured rare clones representing as little as 0.001% of a population and investigated the emergence of resistance to targeted melanoma therapy in vivo.