The filamentous cyanobacterium Anabaena sp. PCC 7120 produces specialized, terminally differentiated cells called heterocysts that are the sites of nitrogen fixation. The genome of Anabaena undergoes at least two specific developmentally regulated DNA rearrangements during heterocyst differentiation. One rearrangement involves the nitrogen-fixation genes nifH, nifD, and nifK. During heterocyst differentiation, an 11-kilobase (kb) DNA element is excised from the 3′ coding region of the nifD gene by site-specific recombination within 11 base pair, directly repeated sequences present at the ends of the element. The excision results in formation of a complete nifD coding sequence and allows transcription of all three genes from a single promoter upstream of nifH. The gene xisA, located at one end of the 11-kb element, is believed to encode the site-specific recombinase responsible for excision of the element from the nifD gene. A second DNA rearrangement occurs close to the 5′ end of the nifS gene and results in placing the genes rbcL and rbcS approximately 10 kb from the nif gene cluster. This rearrangement is also a deletion from the chromosome but involves a significantly larger segment of the genome, 55 kb. The genomic breakpoints of the nifS rearrangement have been cloned and sequenced. The recombination sites show no homology to those involved in the nifD rearrangement. This suggests that each rearrangement is catalyzed by a different site-specific recombination system and that the two arrangements may be independently regulated.