Plasmids containing heteroallelic copies of the Saccharomyces cerevisiae HIS3 gene undergo intramolecular gene conversion in mitotically dividing S. cerevisiae cells. We have used this plasmid system to determine the minimum amount of homology required for gene conversion, to examine how conversion tract lengths are affected by limited homology, and to analyze the role of flanking DNA sequences on the pattern of exchange. Plasmids with homologous sequences greater than 2 kilobases have mitotic exchange rates as high as 2 x 10-events per cell per generation. As the homology is reduced, the exchange rate decreases dramatically. A plasmid with 26 base pairs (bp) of homology undergoes gene conversion at a rate of approximately 1 x 10-10 events per cell per generation. These studies have also shown that an 8-bp insertion mutation 13 bp from a border between homologous and nonhomologous sequences undergoes conversion, but that a similar 8-bp insertion 5 bp from a border does not. Examination of independent conversion events which occurred in plasmids with heteroallelic copies of the HIS3 gene shows that markers within 280 bp of a border between homologous and nonhomologous sequences undergo conversion less frequently than the same markers within a more extensive homologous sequence. Thus, proximity to a border between homologous and nonhomologous sequences shortens the conversion tract length.Numerous examples of genetic exchange between repeated sequences along individual chromosomes or between such elements present on different chromosomes have been observed in eucaryotic organisms. Many of the observed exchanges have been gene conversions in which a sequence of the donor replaces the homologous sequence of the recipient without concomitant change in the donor (12). In Saccharomyces cerevisiae, for which detailed studies have been possible, some of the events include crossing over concomitant with the conversion event (8,9,14), whereas others are mostly limited to conversion alone (5, 6,11,24). These exchanges are effected by the homology which exists between the repeated sequences. Although studies of homology requirements for exchange have been made with Escherichia coli (21,23,29) and mammalian cells (3,15,20), no systematic study has been made with S. cerevisiae to determine the requirements for homology in effecting exchange, particularly conversion, between elements of limited homology.Because exchange of this nature is thought to mimic the normal chromosomal exchange which occurs between DNA molecules of lengthy homology, exchange between elements of limited homology offers an opportunity to examine fundamental questions which relate to the basic mechanism of exchange. Current models of exchange postulate that homology is required to synapse two homologous sequences by the formation of heteroduplex DNA in which a double helix is formed from complementary strands of the participating homologs (7,17,27,30). Examination of exchange between sequences of limited homology should define the absolute length of DNA ne...