Holliday junctions are intermediate structures that are formed and resolved during the process of genetic recombination. To investigate the interaction of junction-resolving nucleases with synthetic Holliday junctions that contain homologous arm sequences, we constructed substrates in which the junction point was free to branch migrate through 26 base-pairs of homology. In the absence of divalent cations, we found that both phage T4 endonuclease VII and phage T7 endonuclease I bound the synthetic junctions to form specific protein-DNA complexes. Such complexes were not observed in the presence of Mg2+, since the Holliday junctions were resolved by the introduction of symmetrical cuts in strands of like polarity. The major sites of cleavage were identified and found to occur within the boundaries of homology. T4 endonuclease VII showed a cleavage preference for the 3' side of thymine bases, whereas T7 endonuclease I preferentially cut the DNA between two pyrimidine residues. However, cleavage was not observed at all the available sites, indicating that in addition to their structural requirements, the endonucleases show strong site preferences.