A linear 5.2-kb HS2/beta-globin construct with an upstream KpnI terminus (4-nucleotide (nt) 3' protruding single strand, PSS) and a downstream SalI terminus (4-nt 5' PSS) was microinjected into fertilized mouse eggs. The injected DNA fragments integrated into the mouse genome primarily as a head-to-tail tandem array. Chromosome/transgene junctions were obtained from seven of eight transgenic animals. All of the junctions occurred in the proximity of a transgene KpnI end; a maximum loss of 8 nt from the transgene terminus was observed. Two of these junctions completely preserved the 4-nt KpnI 3' PSS. Transgene/transgene junctions from two animals were analyzed. SalI/KpnI junctions that completely preserved both the SalI 5' PSS and the KpnI 3' PSS were found in each animal. These are the first examples of complete nt preservation at junctions formed between a 5' PSS terminus and a 3' PSS terminus in transgenic mice. The data are consistent with the fill-in model of Thode et al. [Cell 60 (1990) 921-928] in which alignment proteins juxtapose 5' PSS and 3' PSS termini; DNA polymerase then utilizes the recessed 3'-OH of the 5' PSS terminus as a primer to synthesize DNA across the gap. This mechanism results in the formation of junctions with no loss of sequence. The results described in the present paper suggest that this mechanism may be involved in the formation of junctions in transgenic mice.