λ Site-specific recombination requires a short stretch of sequence homology that might be sensed during strand swapping, during ligation and/or during isomerization of the obligate Holliday junction intermediate. Here, we use half- att site suicide substrates to study single and double top-strand-transfers, isolated from the subsequent steps of the reaction. The double-strand-transfer is analogous to a top-strand exchange and consists of one normal top-strand and one “contrary” bottom-strand to top-strand ligation between the half- att site substrate and its full-site partner. The resulting covalent three-way DNA junctions are poor substrates for resolution in the forward or reverse direction. We show that both the rate and the efficiency of Y-junction formation are homology dependent. Pairing of three nucleotides (either in the forward or in the contrary alignment) provides maximal stability to strand swapping. Complementary base-pairing next to one top-strand site (with or without ligation) stimulates strand-transfer at the other mismatched site. The data suggest that homology can be sensed at the strand-swapping step before ligation. However, homology also stimulates ligation and stabilizes the products, as is evident from the different rates of closed Y-junction formation in the presence or absence of homology. Furthermore, under recombination conditions, single top-strand-transfers are subject to reversal even in the presence of sequence homology; stability depends on a double-strand-transfer, i.e. dissociation of covalent Int.