Circular DNA resulting from V gene replacement was studied with an A-MuLV transformed cell line containing ablts. This cell line undergoes V gene replacement at elevated temperatures in the immunoglobulin (Ig) heavy chain (H) gene. Examination of circular DNA revealed that a heptamer-related sequence (TACTGTG) within the coding region of VDJ was joined to the recombination signal sequence (RSS) of a germline VH segment. This provides direct evidence for a intramolecular DNA deletion mechanism for V gene replacement. In the pre-B cell line as well as in in vivo lymphocytes, unusual circular DNAs were found which were structurally similar to the V gene replacement circles. They represented excision products of the deletion type recombination between one complete RSS and a heptamer-like sequence in the Ig H region.