During it life cycle, the hypotrichous ciliate Oxytricha nova transforms a copy of its chromosomal micronucleus into a transcriptionally active macronucleus that contains linear, gene-sized DNA molecules. The process of macronuclear development involves chromosome fragmentation as well as elimination of large amounts of the micronuclear genome. To obtain a better understanding of the molecular details of this process, the micronuclear organization of a number of cloned macronuclear DNA molecules has been examined. These studies indicate two additional types of DNA rearrangement occur during development. Specific sequences are added to the ends of macronuclear DNA molecules during development while other short blocks of sequences are removed from the bodies of macronuclear DNA molecules by a nucleic acid breakage and joining process. These studies also indicate that the precursors of macronuclear DNA molecules are clustered in the micronuclear chromosomes and imply the existence of large stretches of developmentally eliminated DNA.