An extensive analysis of the fate and structure of polyomavirus-plasmid recombinant molecules transfected into Rat-1 cells has revealed that the DNA often becomes integrated within transformed cell DNA in a head-to-tail tandem arrangement. This occurs independently of the replicative capacity of the transforming DNA and is facilitated by the use of large quantities of DNA during transfection. These observations have led us to suggest that head-to-tail tandems are formed by homologous recombination between transfected DNAs either before or after integration within cellular DNA. To test this hypothesis, we have measured the transforming activity of pairs of mutant, nontransforming, recombinant plasmid DNAs that carry different lesions in the transforming gene of polyomavirus. The results show that, although the individual mutant DNAs are incapable of transformation, transfection with pairs of mutant DNAs leads to the formation of transformed cells at high frequency. Moreover, there is a direct relationship between the distance between the lesions in pairs of mutant DNAs and their transforming activity. Finally, analyses of the structures of integrated recombinant plasmid DNAs and the viral proteins within independent transformed cells prove that recombination occurs between the mutant genomes to generate a wild-type transforming gene.