Poxviruses are large DNA viruses that replicate in the cytoplasm of infected cells and recombine at high frequencies. Calcium phosphate precipitates were used to cotransfect Shope fibroma virus-infected cells with different DNA substrates and the recombinant products assayed by genetic and biochemical methods. We have shown previously that bacteriophage lambda DNAs can be used as substrates in these experiments and recombinants assayed on Escherichia coli following DNA recovery and in vitro packaging. Using this assay it was observed that 2-3% of the phage recovered from crosses between point mutants retained heteroduplex at at least one of the mutant sites. The reliability of this genetic analysis was confirmed using DNA substrates that permitted the direct detection of heteroduplex molecules by denaturant gel electrophoresis and Southern blotting. It was further noted that heteroduplex formation coincided with the onset of both replication and recombination suggesting that poxviruses, like certain bacteriophage, make no clear biochemical distinction between these three processes. The fraction of heteroduplex molecules peaked about 12-hr postinfection then declined later in the infection. This decline was probably due to DNA replication rather than mismatch repair because, while high levels of induced DNA polymerase persisted beyond the time of maximal heteroduplex recovery, we were unable to detect any type of mismatch repair activity in cytoplasmic extracts. These results suggest that, although heteroduplex molecules are formed during the progress of poxviral infection, gene conversion through mismatch repair probably does not produce most of the recombinants. The significance of these observations are discussed considering some of the unique properties of poxviral biology.