The ability of reverse transcriptase to make template switches during DNA synthesis is implicit in models of retrovirus genome replication, as well as in recombination and oncogene transduction. In order to understand such switching, we used in vitro reactions with purified nucleic acids and enzymes. The assay system involved the use of an end-labeled DNA primer so as to allow the quantitation of elongation on a donor template relative to the amount of elongation achieved by template switching (by means of sequence homology) when an acceptor template RNA was added. We examined several variables that affected the efficiency of the reaction: (i) the reaction time, (ii) the relative amounts of acceptor and donor template, (iii) the extent of sequence overlap between the donor and acceptor templates, and (iv) the presence or absence of RNase H activity associated with the reverse transcriptase. The basic reaction, with RNA templates and normal reverse transcriptase, yielded as much as 83% template switching. In the absence of RNase H, switching still occurred but the efficiency was lowered. Also, when the donor template was changed from RNA to DNA, there was still switching; not surprisingly, this was largely unaffected by the presence or absence of RNase H. Finally, we examined the action of the RNase H on RNA templates after primary transcription but prior to template switching. We found that in most cases, both ends of the original RNA template were able to maintain an association with the DNA product. This result was consistent with the work of others who have shown that RNase H acts as an endonuclease.