DNA that contains inverted duplications separated by non-inverted sequences often can form characteristic "underwound loops" when it is denatured and reannealed. An underwound loop is a partially double-stranded, partially denatured segment between the inverted duplications and is produced as follows. During the early stages of the reannealing, intrastrand stem-loop structures form with first-order kinetics when the inverted duplications pair. In a slower second-order reaction, complementary strands (each with a stem-loop) reanneal. The stem-loop structures produce a cruciform in the hybrid. Because of the unpaired sequences in the loop, the cruciform is unstable. It can isomerize to a linear duplex by double-strand exchange of complementary sequences in the stems. This process requires co-ordinated axial rotation of the stems and the flanking duplexes as well as rotation of the loops. If, however, complementary sequences in the loops start to pair, axial rotation is prevented and the stem-loop structures are trapped in a metastable state. The strands of separate, closed rings cannot interwind when they pair. Consequently, the loops observed by electron microscopy have variable patterns of single-stranded denaturation bubbles and duplex segments with both right-handed and left-handed winding. We have used underwound loops to identify a short inverted duplication flanking the γδ recombination sequence of Escherichia coli F factor (isolated on φ80 d3ilv+ transducing phage) and to study DNA from phages Mu and P1 in which the G segments are flanked by inverted duplications. When deproteinized adenovirus-2 DNA was denatured and reannealed, some underwound circles the length of the entire chromosome were observed by electron microscopy. These resulted from the restricted interaction of complementary single-stranded rings generated when pairing of the short inverted terminal duplications closed the ends of single strands. Another type of underwound loop was seen in heteroduplexes containing complementary insertion loops located at different positions in the hybridized strands, such as occurs with P1 cam DNAs. All these underwound structures are similar in appearance to the hybrids formed when topologically separate, complementary single-stranded circles of Colicin E1 DNA were allowed to anneal. © 1977.