Bacteriophage P1 encodes its own site-specific recombination system consisting of a site at which recombination takes place called loxP and a recombinase called Cre. A number of lambda and plasmid substrates containing two loxP sites have been constructed. Using these substrates we have shown both in vivo and in vitro that a fully functional loxP site is composed of no more than 60 bp. In vitro, when an extract containing Cre is used, recombination between loxP sites on supercoiled, nicked-circle or linear DNA occurs efficiently. The most surprising result from the in vitro studies is that 50% of the products of recombination between loxP sites on a supercoiled DNA substrate are present as free supercoiled circles. The ability to produce free products starting with a supercoiled substrate suggests a rather unique property of Cre-mediated lox recombination, the implications of which are discussed in terms of possible effects of the protein on the topology of the DNA molecule.