The major pathway of genetic recombination and DNA break repair in Escherichia coli requires RecBCD enzyme, a complex nuclease and DNA helicase regulated by Chi sites (5'-GCTGGTGG-3'). During its unwinding of DNA containing Chi, purified RecBCD enzyme has two alternative nucleolytic reactions, depending on the reaction conditions: simple nicking of the Chi-containing strand at Chi or switching of nucleolytic degradation from the Chi-containing strand to its complement at Chi. We describe a set of recC mutants with a novel intracellular phenotype: retention of Chi hotspot activity in genetic crosses but loss of detectable nucleolytic degradation as judged by the growth of mutant T4 and lambda phages and by assay of cell-free extracts. We conclude that RecBCD enzyme's nucleolytic degradation of DNA is not necessary for intracellular Chi hotspot activity and that nicking of DNA by RecBCD enzyme at Chi is sufficient. We discuss the bearing of these results on current models of RecBCD pathway recombination.