Interaction between short repeats may be a source of genomic rearrangements and deletions. We investigated possible interactions between short (9 base pairs) direct repeats in yeast by using our previously described system for analyzing bacterial transposon Tn5 excision in yeast. Mutations of either POL3 or POL1, the proposed structural genes for polymerases delta and alpha, respectively, yield high levels of excision at semipermissive temperatures. pol2 (corresponding to polymerase epsilon) and pol2 pol3 double mutants do not exhibit enhanced excision. A majority of excision events involve direct repeats and are precise; the remaining imprecise excisions occur within or in the vicinity of the repeats. The three DNA repair pathways identified by rad1, rad6 and rad18, rad50 and rad52 mutations were examined for their possible role in Tn5 excision; no enhancement was observed in mutants. However, the pol3-stimulated Tn5 excision was reduced in rad52 and rad50 mutants. This suggests the potential for interaction between the systems for DNA double-strand break/recombinational repair and DNA synthesis. Based on the suggestion of Morrison et al. [Morrison, A., Araki, H., Clark, A. B., Hamatake, R. H. & Sugino, A. (1990) Cell 62, 1143-1151] that polymerases delta and alpha are responsible for lagging-strand synthesis and that polymerase epsilon is responsible for leading-strand synthesis, we suggest that Tn5 excision is stimulated under conditions of altered lagging-strand synthesis, possibly due to extended opportunities for single-strand interactions between the inverted insertion sequence I550 repeats of Tn5.