Immunoglobulin genes are shown to undergo dynamic rearrangements during differentiation as well as evolution. We have demonstrated that a complete immunoglobulin heavy chain gene is formed by at least two types of DNA rearrangement during B cell differentiation. The first type of rearrangement is V-D-J recombination to complete a variable region sequence and the second type is S-S recombination to switch a constant region sequence. Both types of recombination are accompanied by deletion of the intervening DNA segment. Structure and organization of CH genes are elucidated by molecular cloning and nucleotide sequence determination. Organization of H chain genes is summarized as VH-(unknown distance)-JH-(6.5 kb)-C mu-(4.5 kb)-C delta-(unknown distance)-C gamma 3-(34 kb)-C gamma 1-(21 kb)-C gamma 2b-(15 kb)-C gamma 2a-(14.5 kb)-C epsilon-(12.5 kb)-C alpha. The S-S recombination takes place at the S region which is located at the 5' side of each CH gene. Nucleotide sequence of the S region comprises tandem repetition of closely related sequences. The S-S recombination seems to be mediated by short common sequences shared among S regions. A sister chromatid exchange model was proposed as a mechanism for S-S recombination. Comparison of nucleotide sequences of CH genes indicates that immunoglobulin genes have scrambled by intervening sequence-mediated domain transfer during their evolution.