A double-stranded DNA cut has been observed in the mating type (MAT) locus of the yeast Saccharomyces cerevisiae in cultures undergoing homothallic cassette switching. Cutting is observed in exponentially growing cells of genotype HO HML alpha MAT alpha HMR alpha or HO HMLa MATa HMRa, which switch continuously, but not in a/alpha HO/HO diploid strains, in which homothallic switching is known to be shut off. Stationary phase cultures do not exhibit the cut. Although this site-specific cut occurs in a sequence (Z1) common to the silent HML and HMR cassettes and to MAT, only the Z1 sequence at the MAT locus is cut. The cut at MAT occurs in the absence of the HML and HMR donor cassettes, suggesting that cutting initiates the switching process. An assay for switching on hybrid plasmids containing mata- cassettes has been devised, and deletion mapping has shown that the cut site is required for efficient switching. Thus a double-stranded cut at the MAT locus appears to initiate cassette transposition-substitution and defines MAT as the recipient in this process.