The relapsing fever agent, Borrelia hermsii, undergoes multiphasic antigenic variation to evade its host's immune response. A frequently observed switch is serotype 7 to 26. Unlike silent vmp genes previously characterized, the transcriptionally silent vmp26 sequence was a pseudogene in lacking a start codon. In serotype 7 the location of the silent vmp26 sequence just downstream of vmp7 on the expression plasmid, as well as on the silent plasmid, was also unique. The demonstration of a predicted circular recombination product in serotype 7 but not serotype 21 populations indicates that the pseudogene was activated by an intramolecular recombination producing a deletion of DNA between 20-nucleotide direct repeats in vmp7 and psi vmp26.