Genetic instability is promoted by unusual sequence arrangements and DNA structures. Hairpin DNA structures can form from palindromes and from triplet repeats, and they are also intermediates in V(D)J recombination. We have measured the genetic stability of a large palindrome which has the potential to form a one-stranded hairpin or a two-stranded cruciform structure and have analyzed recombinants at the molecular level. A palindrome of 15.3 kb introduced as a transgene was found to be transmitted at a normal Mendelian ratio in mice, in striking contrast to the profound instability of large palindromes in prokaryotic systems. In a significant number of progeny mice, however, the palindromic transgene is rearranged; between 15 and 56% of progeny contain rearrangements. Rearrangements within the palindromic repeat occur both by illegitimate and homologous, reciprocal recombination. Gene conversion within the transgene locus, as quantitated by a novel sperm fluorescence assay, is also elevated. Illegitimate events often take the form of an asymmetric deletion that eliminates the central symmetry of the palindrome. Such asymmetric transgene deletions, including those that maintain one complete half of the palindromic repeat, are stabilized so that they cannot undergo further illegitimate rearrangements, and they also exhibit reduced levels of gene conversion. By contrast, transgene rearrangements that maintain the central symmetry continue to be unstable. Based on the observed events, we propose that one mechanism promoting the instability of the palindrome may involve breaks generated at the hairpin structure by a hairpin-nicking activity, as previously detected in somatic cells. Because mammalian cells are capable of efficiently repairing chromosome breaks through nonhomologous processes, the resealing of such breaks introduces a stabilizing asymmetry at the center of the palindrome. We propose that the ability of mammalian cells to eliminate the perfect symmetry in a palindromic sequence may be an important DNA repair pathway, with implications regarding the metabolism of palindromic repeats, the mutability of quasipalindromic triplet repeats, and the early steps in gene amplification events.Recombination rates are known to vary along chromosomes. A fixed genetic distance can correspond to widely different physical lengths depending on the location on the chromosome. Although certain sequences such as the site in phage and Escherichia coli are recognized by enzymes that promote recombination (43), growing evidence suggests that DNA structure and accessibility, rather than sequence per se, have a profound impact on recombination. During meiosis in mammals, for example, very different recombination rates can be observed at identical chromosomal regions in males and females (11; for a review, see reference 45). In Saccharomyces cerevisiae, where most, if not all, meiotic recombination is initiated by double-strand breaks (48), DNA sequence is not the primary determinant of the position of breaks; rather, breaks map ...