Chinese hamster cells with a lesion in the CAD gene (cell line Urd-A) require exogenous uridine to survive. Uridine prototrophs could be isolated after introducing two recombinant plasmids containing overlapping fragments of a cloned Syrian hamster CAD gene. In contrast, no uridine prototrophs were obtained after introducing a plasmid containing only one of the two overlapping fragments. DNA restriction analysis showed that the prototrophic transformants contain a functional CAD gene which was formed by a recombination event in the overlapping region of the two clones. Most of the recombination events involved homologous exchanges, and some of them apparently were reciprocal. In situ hybridization analysis revealed that the donated sequences were integrated at a single chromosomal site which was different in each transformant. These results demonstrate the existence of a recombination system(s) in mammalian cells that can catalyze homologous exchanges. Recombination between donated sequences is a means by which this system can be characterized and also utilized for the production of novel gene fusions.