The T-DNA transfer process of Agrobacterium tumefaciens is activated by the induction of the expression of the Ti plasmid virulence (vir) loci by plant signal molecules such as acetosyringone. The vir gene products act in trans to mobilize the T-DNA element from the bacterial Ti plasmid. The T-DNA is bounded by 25-base pair direct repeat sequences, which are the only sequences on the element essential for transfer. Thus, specific reactions must occur at the border sites to generate a transferable T-DNA copy. The T-DNA border sequences were shown in this study to be specifically nicked after vir gene activation. Border nicks were detected on the bottom strand just after the third or fourth base (+/- one or two nucleotides) of the 25-base pair transferpromoting sequence. Naturally occurring and base-substituted derivatives of the 25-base pair sequences are effective substrates for acetosyringone-induced border cleavage, whereas derivatives carrying only the first 15 or last 19 base pairs of the 25-base pair sequence are not. Site-specific border cleavages occur within 12 hours after acetosyringone induction and probably represent an early step in the T-DNA transfer process.