RNA-mediated recombination was thought to exist because of the observation of intron loss and the presence of pseudogenes. Until recently, such processes occurring on an evolutionary time frame have been difficult to identify and characterize. An assay has been developed that allows the detection of RNA-mediated recombination, both homologous, RNA-mediated gene conversion (resulting in intron loss) and nonhomologous, RNA-mediated recombination (resulting in pseudogene formation) in yeast Saccharomyces cerevisiae. RNA-mediated recombination in its broadest sense requires transcription, reverse transcription and recombination. We have shown that the reverse transcriptase activity for these events is provided by the retrotransposon Ty. Structural analysis of the cellular cDNA, inserted into yeast chromosomal DNA in the absence of homology, revealed that the 5' end corresponded to the RNA start site and that the 3' end was polyadenylated. Furthermore, these cDNAs were embedded in Ty sequences. This structure suggests that Ty may also be required for priming reverse transcription of the cellular transcript and for insertion of the sequences into the chromosome. LTR-containing retrotransposons such as Ty have cis-acting sequences that specify priming and their programmed reverse transcription. However, a cellular transcript lacking such cis-acting sequences can still be reverse transcribed. We have shown that Ty is required for priming and that priming occurs via a template switch: reverse transcription is initiated on the Ty transcript and then switches onto the poly(A) tail of the cellular transcript. An alternative source of reverse transcriptase activity in mammalian cells is LINE elements or poly(A) retrotransposons. Because these elements do not contain LTRs, the mechanism of priming and reverse transcription must be different than Ty or mammalian retroviruses. Experiments in which cellular transcripts are primed, using the reverse transcriptase from a LINE- like element are being compared to those primed by the Ty reverse transcriptase. Future studies will be directed at further dissecting the mechanism of RNA-mediated recombination and identifying the viral and cellular functions required.