When two linear DNA molecules with overlapping, homologous ends were incubated with a yeast nuclear extract, they recombined at the region of homology to produce a joint molecule. We have identified a 5'-3' exonuclease in the extract that is likely to be responsible for the formation of the observed product. We propose that the exonuclease degrades each substrate to reveal regions of complementary sequence which anneal to form a recombinant product. Consistent with this model, we have partially purified the activity that promotes joint molecule formation and found it to cofractionate with a 5'-3' exonuclease activity through three consecutive chromatography steps. We have further characterized the reaction to determine the optimal length of homology. Substrates with homologous terminal overlaps of 29 to 958 bp were capable of product formation, whereas substrates with longer overlaps were not. Extracts prepared from a number of recombinationdefective or nuclease-deficient strains revealed no defect in exonuclease activity, indicating that the reaction is likely to be dependent upon the product of an as yet unidentified gene.The importance of strand-specific exonucleases in genetic recombination has been well documented. In prokaryotes, the recE gene product (exonuclease VIII), the T7 gene 6 product, and X exonuclease are all 5'-3' double-stranded exonucleases proven to play a role in recombination (reviewed in reference 41). Several models for recombination in eukaryotes also predict the involvement of exonucleases. In the double-strand break repair (DSBR) model, it is proposed that the DNA ends created at the break are degraded by a strand-specific exonuclease to create single-stranded tails which are able to invade homologous DNA, thus initiating the recombination process (51). In vivo studies have documented 5'-3' degradation of the broken ends formed at several double-strand breaks associated with recombination hot spots in the yeast Saccharomyces cerevisiae. After HO endonuclease cleavage at the AMT locus during mating-type switching, the DNA undergoes exonucleolytic degradation to produce a 3' tail on the distal side of the HO cut (55). This strand is believed to invade the intact donor of mating-locus information, thus initiating transfer of information. A double-strand break induced at theARG4 locus during meiosis is processed to leave a 3' single-stranded tail (48). This site has been shown to be a recombination initiation site (34), indicating that a 3' tail may be involved in the initiation of meiotic recombination. Similarly, a meiotic recombination hot spot created by the insertion of the LEU2 gene at the HIS4 locus is associated with a meiosis-specific doublestrand break that is processed to generate 3' single-stranded tails (5, 7).An exonuclease is also envisioned to act in the singlestrand annealing (SSA) model of recombination, which was proposed to explain certain recombination events in mammalian systems (24)(25)(26). In this model, strand-specific degradation by an exonuclease is predicted to...