A protein which promotes DNA strand transfer between linear double-stranded M13mp19 DNA and single-stranded viral M13mp19 DNA has been isolated from recA- E.coli. The protein is DNA polymerase I. Strand transfer activity residues in the small fragment encoding the 5'-3' exonuclease and can be detected using a recombinant protein comprising the first 324 amino acids encoded by polA. Either the recombinant 5'-3' exonuclease or intact DNA polymerase I can catalyze joint molecule formation, in reactions requiring only Mg2+ and homologous DNA substrates. Both kinds of reactions are unaffected by added ATP. Electron microscopy shows that the joint molecules formed in these reactions bear displaced single strands and therefore this reaction is not simply promoted by annealing of exonuclease-gapped molecules. The pairing reaction is also polar and displaces the 5'-end of the non-complementary strand, extending the heteroduplex joint in a 5'-3' direction relative to the displaced strand. Thus strand transfer occurs with the same polarity as nick translation. These results show that E.coli, like many eukaryotes, possesses a protein which can promote ATP-independent strand-transfer reactions and raises questions concerning the possible biological role of this function.