Mammalian DNAs cloned as artificial chromosomes in yeast (YACs) frequently are chimeras formed between noncontiguous DNAs. Using pairs of human and mouse YACs we examined the contribution of recombination during transformation or subsequent mitotic growth to chimeric YAC formation. The DNA from pairs of yeast strains containing homologous or heterologous YACs was transformed into a third strain under conditions typical for the development of YAC libraries. One YAC was selected and the presence of the second was then determined. Co-penetration of large molecules, as deduced from co-transformation of markers identifying the different YACs, was > 50%. In approximately half the cells receiving two homologous YACs, the YACs had undergone recombination. Co-transformation depends on recombination since it was reduced nearly 10-fold when the YACs were heterologous. While mitotic recombination between homologous YACs is nearly 100-fold higher than for yeast chromosomes, the level is still much lower than observed during transformation. To investigate the role of commonly occurring Alu repeats in chimera formation, spheroplasts were transformed with various human YACs and an unselected DNA fragment containing an Alu at one end and a telomere at the other. When unbroken YACs were used, between 1 and 6% of the selected YACs could incorporate the fragment as compared to 49% when the YACs were broken. We propose that Alu's or other commonly occurring repeats could be an important source of chimeric YACs. Since the frequency of chimeras formed between YACs or a YAC and an Alu-containing fragment was reduced when a rad52 mutant was the recipient and since intra-YAC deletions are reduced, rad52 and possibly other recombination-deficient mutants are expected to be useful for YAC library development.