In the LPT line of polyoma (Py)-transformed rat cells, amplification of the integrated viral DNA and of cell nucleotide sequences flanking the viral integration site, can be induced either spontaneously or by treatment with carcinogens. We show here that the amplified DNA includes interspersed viral and cellular sequences generated by 'illegitimate' recombination events. Genomic libraries have been prepared in phage lambda vectors from LPT cells treated with the inducing agent mitomycin C and from untreated LPT cells. Four phages, including viral-cell DNA recombinants, have been isolated from these libraries. Sequencing through the recombination sites revealed the following characteristics: (i) The crossover points map at four different positions in the viral DNA and at four different positions in the flanking cell DNA. (ii) There are very short homologous sequences of 1, 2, or 4 bp, at the recombination sites. (iii) Aside from the exchanges between the viral and the cellular DNA, no further rearrangements occurred around the new viral-cellular DNA junctions. (iv) Next to the recombination sites, there are blocks of homopurine-homopyrimidine sequences, which may assume a structure that differs from the Watson-Crick double helix. (v) Clustered homologous sequence blocks of up to 10 bp are present less than 200 bp away from the recombination sites. These homologies are not in register. Based on these results, we propose a model that may account for these recombination events and, more generally, for recombination events that occur during gene amplification in mammalian cells.