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We describe a method for the formation of hybrid genes by in vivo recombination between two genes with partial sequence homology. DNA structures consisting of plasmid vector sequences, flanked by the alpha 2 interferon gene on the one side and a portion of the alpha 1 interferon gene (homology about 80%) on the other, were transfected into E. coli SK1592. Appropriate resistance markers allowed the isolation of colonies containing circular plasmids which arose by in vivo recombination between the partly homologous interferon gene sequences. Eleven different recombinant genes were identified, six of which encoded new hybrid interferons not easily accessible by recombinant DNA techniques.