The replication terminus region of the Escherichia coli chromosome encodes a locus, dif, that is required for normal chromosome segregation at cell division. dif is a substrate for site-specific recombination catalysed by the related chromosomally encoded recombinases XerC and XerD. It has been proposed that this recombination converts chromosome multimers formed by homologous recombination back to monomers in order that they can be segregated prior to cell division. Strains mutant in dif, xerC or xerD share a characteristic phenotype, containing a variable fraction of filamentous cells with aberrantly positioned and sized nucleoids. We show that the only DNA sequences required for wild-type dif function in the terminus region of the chromosome are contained within 33 bp known to bind XerC and XerD and that putative active site residues of the Xer recombinases are required for normal chromosome segregation. We have also shown that recombination by the loxP/Cre system of bacteriophage P1 will suppress the phenotype of a dif deletion strain when loxP is inserted in the terminus region. Suppression of the dif deletion phenotype did not occur when either dif/Xer or loxP/Cre recombination acted at other positions in the chromosome close to oriC or within lacZ, indicating that site-specific recombination must occur within the replication terminus region in order to allow normal chromosome segregation.