In Escherichia coli in vitro constructions of perfect palindromes larger than 30 base pairs (bp) long have in general been unstable. A perfect palindrome has the unique possibility of forming a cruciform structure, and it is this feature which probably results in its instability. Negative supercoiling favours the formation of the cruciform conformation, which in turn causes the molecule to relax. This relaxation may render replicons containing large perfect palindromes inviable. An alternative hypothesis for inviability has been that the cruciform interferes with replication by favouring strand switching by polymerase I. Here we show that the simultaneous absence of two recombination nucleases, the recBC product, exonuclease V, and the sbcB product, exonuclease I, confers viability on a derivative of phage lambda carrying a perfect palindrome of inverted repeat length 1,600 bases. This observation suggests a third hypothesis--that nucleolytic cleavage of the cruciform is responsible for the inviability of the phage. Such an activity has been shown in vitro for T4 exonuclease VII.