Highly efficient intermolecular crossing-over was observed occurring between regions of limited homology in a fd filamentous phage and a plasmid. These extraneous regions corresponded to two overlapping fragments of the beta-lactamase gene. Gene reconstitution through homologous recombination of these regions yielded a highly ampicillin-resistant phenotype in Escherichia coli while co-expression of the enzyme fragments afforded low and thermosensitive activity. The recombination rates were between two and three orders of magnitude higher than that reported between plasmids using a similar assay. The fd-plasmid cointegrate was detected in recombined bacteria, as was its encapsidation into phage particles and subsequent transduction. A 100-fold reduction in the recombination rate was observed in a recA mutant strain even though crossing-over was still efficient. This gene reconstitution strategy is generally applicable to phage display technology and provides an easy way for constructing large combinatorial libraries of mutants.