Previous studies have demonstrated that mitotic Saccharomyces cerevisiae cells contain an endonuclease that cleaves Holliday junctions. In this paper, the cleavage of a number of model branched substrates has been characterized in detail. Three-armed Y-branched molecules were not substrates for the enzyme. Holliday junction substrates constructed from wild-type lambda att sites were resolved in a concerted reaction by paired single-strand breaks that contained 5'-phosphate and 3'-hydroxyl groups and were often symmetrically related. Holliday junctions were also constructed using DNAs derived from lambda safG and safT mutants to alter the nucleotide sequence immediately flanking the cross-strand exchange. These one to six base-pair changes in nucleotide sequence were observed to have dramatic effects on both the directionality and rate of resolution. More than 90% of wild-type junctions were cleaved in only one direction, while Holliday junctions composed of safT DNA were cleaved equally in both possible directions. Hybrid junctions composed of half wild-type DNA and half safG DNA were cleaved in the same orientation as the wild-type junction but at one-seventh of the rate, while junctions constructed completely from safG DNA were not cleaved at all. The cleavage sites were mapped at the nucleotide level and the locations of the paired nicks made by the endonuclease were also found to be affected by the sequence of the substrates and in such a way as to account for the directionality of cleavage. These results have important consequences for the interpretation of genetic experiments, since they provide biochemical evidence that some of the non-random nature of genetic recombination might be due to non-randomly distributed resolution processes.