We show that displaced single-stranded overhangs are transiently generated and destroyed during nick translation by E. coli DNA polymerase I. Evidence that hyper-rec mutants have an increased frequency of such overhang structures is discussed. The transient generation of overhangs may be significant for general recombination. The 5' leads to 3' exonuclease activity of polymerase I specifically hydrolyzes such overhangs to yield a nick. Overhangs are generated by polymerization, but after every polymerization step, either polymerase or exonuclease can act--55% of the time, polymerization occurred first. At this frequency overhangs of greater than or equal to 12 nucleotides are generated every 1300 nucleotides polymerized. We suggest that many DNA strand discontinuities are displaced single-stranded overhangs, rather than gaps or simple nicks.