Transfection of retrovirus packaging cells with linear DNA from a retroviral vector missing the 3' long terminal repeat (3' LTR) results in production of infectious virus. Analysis of the newly formed proviruses indicates that restoration of the 3' LTR sequences necessary for reverse transcription and integration occurred due to end-to-end template switching by mammalian RNA polymerase II (RNAP II) in the packaging cells. These observations argue that RNAP II can utilize double-strand breaks and gaps in DNA to generate "recombinant" transcripts in vivo and suggest a mechanism for mutation and recombination of retroviruses.