In the first step of V(D)J recombination, the RAG1 and RAG2 proteins c
leave DNA between a signal sequence and the adjacent coding sequence,
generating a blunt signal end and a coding end with a closed hairpin s
tructure. These hairpins are intermediates leading to the formation of
assembled antigen receptor genes. It is shown here that the hairpins
are formed by a chemical mechanism of direct trans-esterification, ver
y similar to the early steps of transpositional recombination and retr
oviral integration. A minor variation in the reaction is sufficient to
divert the process from transposition to hairpin formation.