The variable regions of immunoglobulin heavy chains are encoded in the germ line by three discrete DNA segments: V_H (variable) elements, D (diversity) elements and J_H (joining) elements. During the differentiation of B lymphocytes, individual segments from each group are brought together by recombination to form the complete V_HDJ_H variable region^1–8. To understand these processes better, we have now isolated and sequenced molecular clones representing intermediates (DJ_H fusions) and final products ( V_H-to-DJ_H joins) of heavy-chain gene rearrangement in two cell lines^9,10 that represent analogues of cells at early stages of B-lymphocyte differentiation^11–13. Heavy-chain gene assembly in one cell line but not in the other is accompanied by the appearance of short nucleotide insertions at the recombinational junctions. The generation of such insertions is positively correlated with the expression of terminal deoxynucleotidyl transferase in these lines.