The replication of vaccinia virus proceeds through concatemeric intermediates which are resolved into unit-length DNA. In vaccinia virus-infected cells, plasmids containing the vaccinia virus DNA junction fragment that connects concatemers are resolved into linear minichromosomes of vector DNA flanked by hairpin loops. Resolution requires two copies of a specific nucleotide sequence conserved among poxviruses and found proximal to the hairpin loop. This study demonstrates that orientation of each sequence with respect to the other as well as to the axis of symmetry is critical for resolution, the processing of plasmids containing heterologous pairs of resolution sites is influenced by mismatched nucleotides between the sites, and the vaccinia virus hairpin in the linear minichromosome is a heteroduplex composed of DNA from each strand of the concatemer junction. A model incorporating site-specific recombination and orientated branch migration is proposed to account for resolution of the vaccinia virus concatemer junction.