Homologous recombination by the E. coli RecBC pathway occurs at elevated frequency near Chi sites. We reported previously that Chi induces RecBC enzyme to cleave one DNA strand--that containing the Chi sequence 5'G-C-T-G-G-T-G-G3'. We report here that the Chi-dependent cleavage occurs four, five, or six nucleotides to the 3' side of the Chi octamer and produces nicks with 3'-OH and 5'-PO4 groups. Chi-dependent cleavage occurs if RecBC enzyme approaches the Chi sequence from the right, but not if it approaches only from the left, during unwinding of the duplex DNA substrate. A single RecBC enzyme molecule appears to cleave the DNA and to release part of it as a single-stranded fragment. These and previous results indicate that Chi-dependent cleavage is concomitant with DNA unwinding by RecBC enzyme and provide an enzymatic basis for the orientation-dependence of Chi recombinational hotspot activity. These observations demonstrate a key step of a proposed model of recombination in which RecBC enzyme produces a potentially invasive single-stranded DNA tail extending from Chi to its left. We discuss the relation between the action of Chi sites and that of special sites enhancing eukaryotic recombination.