The nucleoprotein filament formed on a circular single strand by Escherichia coli RecA protein in vitro can pair with homologous duplex DNA even when the latter lacks a free homologous end, but subsequent progression of the reaction through strand exchange requires an end in at least one strand of the duplex DNA. We purified from E. coli an endonuclease activity that cleaves the outgoing strand of duplex DNA at the junction of homologous and heterologous sequences in three-stranded RecA-recombination intermediates. This endonuclease activity also cleaves specifically at the junctions of duplex and single-stranded regions in synthetic double-stranded oligonucleotides whose central portion consists of unpaired heterologous sequences. These activities are consistent with a role in recombination and repair of DNA.