Previously, we demonstrated the interaction of homologous linear duplexes with formation of four-way DNA structures on the model of five PCR products. We propose that homologous duplex interaction is initiated by the nucleation of several dissociated base pairs of the complementary ends of two fragments with Holliday junction formation, in which cross point migration occurs via spooling of DNA strands from one duplex to the other one, finally resulting in complete resolution into new or previously existing duplexes. To confirm that DNA-DNA interaction involves formation of four-way DNA structures with strand exchange at the cross point, we have demonstrated the strand exchange process between identical duplexes using homologous fragments, harboring either biotin label or (32)P-label. Incubation of the mixture resulted in the addition of (32)P-label to biotin-labeled fragments, and the intensity of (32)P-labeling of biotinylated fragments was dependent upon the incubation duration. DNA-DNA interaction is not based on surface-dependent denaturing, as Triton X-100 does not decrease the formation of complexes between DNA duplexes. The equilibrium concentration of Holliday junctions depends on the sequences of the fragment ends and the incubation temperature. The free energy of Holliday junction formation by the fragments with GC and AT ends differed by 0.6 kcal/mol. Electron microscopic analysis demonstrated that the majority of Holliday junctions harbor the cross point within a 300 base pair region of the fragment ends. This insight into the mechanism of homologous duplex interaction extends our understanding of different DNA rearrangements. Understanding of DNA-DNA interaction is of practical use for better interpretation and optimization of PCR-based analyses.