When inserted at novel locations in the yeast genome, the Saccharomyces cerevisiae recombination hotspot HOT1 stimulates mitotic exchange in adjacent sequences. HOT1 is derived from the rDNA repeat unit, and the sequences required for the recombination-stimulatory activity closely correspond to the rDNA transcription enhancer and initiation site, suggesting there is an association between high levels of RNA polymerase I transcription and increased recombination. To directly test whether RNA polymerase I is essential for HOT1 activity, a subunit of RNA polymerase I was deleted in a strain in which rRNA is transcribed by RNA polymerase II. HOT1 is completely inactive in this strain. Deletion analysis and site-directed mutagenesis were used to further define the sequences within the rDNA enhancer required for HOT1 activity. These studies show that the enhancer contains at least four distinct regions that are required for hotspot activity. In most cases mutations in these regions also decrease transcription from this element, further confirming the association of recombination and transcription.