Bacteriophage T2 alleles are excluded in crosses between T2 and T4 because of genetic isolation between these two virus species. The severity of exclusion varies in different genes, with gene 56, encoding an essential dCT(D)Pase/dUT(D)Pase of these phages, being most strongly affected. To investigate reasons for such strong exclusion, we have (1) sequenced the T2 gene 56 and an adjacent region, (2) compared the sequence with the corresponding T4 DNA, (3) constructed chimeric phages in which T2 and T4 sequences of this region are recombined, and (4) tested complementation, recombination, and exclusion with gene 56 cloned in a plasmid and in the chimeric phages in Escherichia coli CR63, in which growth of wild-type T2 is not restricted by T4. Our results argue against a role of the dCTPase protein in this exclusion and implicate instead DNA sequence differences as major contributors to the apparent species barrier. This sequence divergence exhibits a remarkable pattern: a major heterologous sequence counter-clockwise from gene 56 (and downstream of the gene 56 transcripts) replaces in T2 DNA the T4 gene 69. Gene 56 base sequences bordering this substituted region are significantly different, whereas sequences of the dam genes, adjacent in the clockwise direction, are similar in T2 and in T4. The gene 56 sequence differences can best be explained by multiple compensating frameshifts and base substitutions, which result in T2 and T4 dCTPases whose amino acid sequences and functions remain similar. Based on these findings we propose a model for the evolution of multiple sequence differences concomitant with the substitution of an adjacent gene by foreign DNA: invasion by the single-stranded segments of foreign DNA, nucleated from a short DNA sequence that was complementary by chance, has triggered recombination-dependent replication by "join-copy" and "join-cut-copy" pathways that are known to operate in the T-even phages and are implicated in other organisms as well. This invasion, accompanied by heteroduplex formation between partially similar sequences, and perhaps subsequent partial heteroduplex repair, simultaneously substituted T4 gene 69 for foreign sequences and scrambled the sequence of the dCTPase gene 56. We suggest that similar mechanisms can mobilize DNA segments for horizontal transfer without necessarily requiring transposase or site-specific recombination functions.