In a process similar to exon splicing, ciliates use DNA splicing to produce a new somatic macronuclear genome from their germline micronuclear genome after sexual reproduction. This extra layer of DNA rearrangement permits novel mechanisms to create genetic complexity during both evolution and development. Here we describe a chimeric macronuclear chromosome in Oxytricha trifallax constructed from two smaller macronuclear chromosomes. To determine how the chimera was generated, we cloned and sequenced the corresponding germline loci. The chimera derives from a novel locus in the micronucleus that arose by partial duplication of the loci for the two smaller chromosomes. This suggests that an exon shuffling-like process, which we call MDS shuffling, enables ciliates to generate novel genetic material and gene products using different combinations of genomic DNA segments.