A plasmid can be maintained in linear form in baker's yeast if it bears telomeric sequences at each end. Linear plasmids bearing cloned telomeric C4A4 repeats at one end (test end) and a natural DNA terminus with approximately 300 bps of C4A2 repeats at the other or control end were introduced by transformation into yeast. Test-end termini of 28 to 112 bps supported telomere formation. During telomere formation, C4A2 repeats were often transferred to test-end termini. To determine in greater detail the fate of test-end sequences on these plasmids after propagation in yeast, test-end telomeres were subcloned into E. coli and sequenced. DNA sequencing established a number of points about the molecular events involved in telomere formation in yeast. The results suggest that there are at least two mechanisms for telomere formation in yeast. One is mediated by a recombination event that requires neither a long stretch of homology nor the RAD52 gene product. The other mechanism is by addition of C1-3A repeats to the termini of linear DNA molecules. The telomeric sequence required to support C1-3A addition need not be at the very end of a molecule for telomere formation.