The termini of the 61 kb palindromic rDNA molecules of Physarum polycephalum possess a series of multiple inverted repeats in which are located specific single-strand gaps and tightly attached protein. After treating rDNA with S1 nuclease, we have cloned several 5 kb Eco RI terminal restriction fragments. Sequencing of more than 800 nucleotides from the end of one such clone reveals the presence of six to ten tandemly repeated units averaging 140 ± 4 bp in length and flanked by Hae III sites. Each 140 nucleotide repeat unit can form thermodynamically stable hairpin structures based on complex internal palindromic components. When the specific gap sequence CCCTA is present, it is located near the apex of a hairpin component. These secondary structures are formed in growing plasmodia, as seen in electron micrographs of native rDNA molecules, which also reveal apparent recombination forms involving rDNA ends and noncontiguous DNA segments. Recombination initiated at terminal single-strand hairpin loops can result in genetic exchange of ribosomal gene sequences and can lead to completion of 5′ nucleotide sequences at ends of newly replicated rDNA molecules.