Double-strand breaks (DSB) were generated in the Drosophila melanogaster white gene by excision of the P-w hd element. An ectopic P-element vector carrying a modified white gene was used as a template for DSB repair. All template-dependent repair events were examined, and four different classes of events were recovered. The two most common products observed were gene conversions external to the P-w hd element and gene conversions (targeted transpositions) internal to the P-w hd element. These two events were equally frequent. Similar numbers for both orientations of internal conversion events were recovered. The results suggest that P-element excision occurs by a staggered cut that leaves behind at least 33 nucleotides of single-stranded sequence. Our results further demonstrate that an efficient homology search is conducted by the broken end with less than 31 nucleotides. Double-strand break (DSB) repair is used for mating-type switching and meiotic recombination in yeast (34) and immunoglobulin V(D)J rearrangement in vertebrates (26). In addition, DSB repair has been exploited as a gene-targeting method in Drosophila melanogaster, yeast, Caenorhabditis elegans, and mice (6,19,38,44,49,59). Understanding this process of repair will improve in vivo genome manipulation techniques and may lead to an efficient gene-targeting system for higher eukaryotes.P elements in Drosophila transpose by a cut-and-paste mechanism, and their excision produces a DSB in the chromosome (12,19,32). The break can be repaired by copying homologous sequence from the sister strand, the homolog, an ectopic sequence, or a plasmid (12,13,19,31,33,38,39). Several lines of evidence suggest that P excision occurs by a staggered cut at the P ends, leaving behind a single-strand sequence that includes part or all of the terminal 31-bp inverted repeat (31,40,55).A number of models have been developed to explain the repair of DSBs in a genome. The single-strand annealing model proposes that the DNA ends at a break are rendered single stranded and that homologous sequences anneal (36,57). Repair synthesis and ligation seal the break. This model explains the formation of repair events with deletions.The DSB repair model (45,59) proposes that the break in the chromosome is enlarged to a gap by exonucleases and that this gap is repaired by copying homologous sequence from elsewhere in the genome. The Holliday junctions that are formed in this model are resolved by nucleolytic cleavage, thus leading to the homologous recombination products.Studies on DSB repair in mitotically dividing Drosophila cells have revealed information about the break repair pathway in this organism (3,12,13,19,31,33,38,39,55). Many of the gap repair products contain stretches of homologous DNA copied from a template. None of the products involve exchange of flanking markers but, instead, are the result of gene conversion (12,19,58). The synthesis-dependent strand-annealing (SDSA) model was proposed to account for these observations (16,38). This model predicts that each side o...