When plasmids carrying a fragmented gene with segments present as direct repeats are introduced into mammalian cells, recombination or gene conversion between the repeated sequences can reconstruct the gene. Intramolecular recombination leads to the deletion of the intervening sequences and the loss of one copy of the repeat. This process is known to be stimulated by double-strand breaks. Two current models for recombination in eucaryotic cells propose that the reaction is initiated by double-strand breaks, but differ in their predictions as to the fate of the intervening sequences. One model suggests that these sequences are always lost, while the other indicates that the reaction will be conservative as a function of the position of the double-strand break. We have constructed a plasmid in which two overlapping portions of the simian virus 40 early region, which contains the origin and T-antigen gene, are present as direct repeats separated by sequences containing a plasmid with a simian virus 40 origin of replication. Recombination across the repeated segments could produce a plasmid with an origin of replication and/or a plasmid with a gene for a functional T-antigen which would drive the replication of both. Introduction of this construction into African green monkey kidney cells, without coinfection, establishes a condition in which the products of the recombination or gene conversion can be interpreted unambiguously. We find that the majority of the reconstruction reactions are nonconservative.