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Many amplified genes, including some oncogenes, are organized as large inverted repeats. How such giant palindromes are generated remains largely unknown. Recent studies of a palindrome in the ciliate Tetrahymena suggest a novel mechanism that requires chromosome breakage next to short inverted repeats. The prevalence of short inverted repeats in eukaryotic genomes raises the interesting possibility that this process may occur widely as a response to chromosome damage. Here we demonstrate that in Saccharomyces cerevisiae, large DNA palindromes are formed efficiently, probably by intramolecular recombination, when a double-strand break is introduced next to short inverted repeats. These results suggest a general mechanism for large palindromic DNA formation and reveal an important new source of genome instability resulting from chromosome breakage at selective sites.

Large palindromic DNAs are found in a wide variety of eukaryotic cells. In Tetrahymena thermophila, a large palindrome is formed from a single rRNA gene (rDNA) during nuclear differentiation. We present evidence that a key step in the formation of the rDNA palindrome of T. thermophila involves homologous intramolecular recombination. Heteroduplex micronuclear rDNA molecules were constructed in vitro and microinjected into developing macronuclei, where they formed palindromes. Analysis of the resulting palindromes indicated that both strands of the microinjected rDNA are used to form the same palindrome. This study, together with a previous study (L. F. Yasuda and M.-C. Yao, Cell 67:505-516, 1991), is the first to define a molecular pathway of palindrome formation. The process is initiated by chromosome breakage at sites flanking the micronuclear rDNA. An intramolecular recombination reaction, guided by a pair of short inverted repeats located at the 5' end of the excised rDNA, covalently joins the two strands of micronuclear rDNA in a giant hairpin molecule. Bidirectional DNA replication converts the giant hairpin molecule to a palindrome. We suggest that the general features of this pathway are applicable to palindrome formation in other cell types.