N-methyl-N'-nitro-N-nitrosoguanidine (MNNG), which alkylates many positions in DNA including the 06 position of guanine, efficiently induces intrachromosomal homologous recombination in mouse L-cells. To investigate the role of 06-methylguanine in the induction of homologous recombination in human cells, three cell strains containing duplicated copies of the Herpes simplex virus I thymidine kinase (Htk) gene and three cell strains containing duplicated copies of the gene coding for hygromycin phosphotransferase (hyg) were treated with MNNG. Neither the Htk genes nor the hyg genes code for a functional enzyme because each contains an insertion mutation at a unique site, i.e. 8-bp XhoI linker insertions in the Htk genes and 10-bp HindIII linker insertions in the hyg genes. These cell strains differ in their level of 06-alkylguanine-DNA alkyltransferase (AGT), which specifically removes the methyl group from the 06 position of guanine. Generation of a functional Htk or hyg gene has been shown to require intrachromosomal homologous recombination between the two mutant Htk genes or the two mutant hyg genes. In all six cell strains, MNNG induced a dose-dependent increase in the frequency of homologous recombination. In each set, there was an inverse correlation between the frequency of MNNG-induced recombination and the level of AGT activity. To further study the role of 06-methylguanine in the induction of homologous recombination, we used 06-benzylguanine to inactivate AGT in two additional human cell strains containing the hyg recombination substrate. After depletion of AGT activity by 06-benzylguanine, both cell strains showed a significantly elevated level of MNNG-induced homologous recombination. These results indicate that 06-methylguanine is the principal lesion responsible for the induction of homologous recombination in these human cells by this methylating agent.