The bacterial transposon Tn7 uses a cut and paste mechanism to translocate between non-homologous insertion sites. In the first step of recombination, double-strand breaks at each transposon end disconnect the element from the donor backbone; in the second step, the now exposed 3' transposon ends join to the target DNA. To dissect the chemical steps in these reactions, we have used mutant transposons altered at and near their extreme termini. We find that the initiating double-strand breaks result from a collaboration of two distinct DNA strand processing activities, one mediating cleavages at the 3' ends of Tn7, which can be blocked by changes at the transposon tips, and another mediating cleavages at the 5' ends. The joining of exposed 3'transposon ends to the target DNA can be blocked by changing the transposon tips. Our results suggest that the target joining step occurs through two usually concerted, but actually separable, reactions in which individual 3' transposon ends are joined to separate strands of the target DNA. Thus Tn7 transposition involves several distinct DNA processing reactions: strand cleavage and strand transfer reactions at the 3' ends of the transposon, and separate strand cleavage reactions at the 5' ends of the transposon.