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We describe two unusual 5S RNA regions from Neurospora crassa that are tightly linked. Sequence analysis suggests that these genes or pseudogenes, which we designate zeta (zeta) and eta (eta), arose by a 794-base-pair tandem duplication followed by hundreds of exclusively cytosine to thymine mutations. The duplication was most likely generated by nonhomologous recombination involving a DNA segment having a striking purine-pyrimidine strand asymmetry. Restriction analysis of genomic DNA from tissue grown in the presence or absence of 5-azacytidine indicates that many, and perhaps all, cytosines in the duplicated region are methylated in most cells. This is in contrast to the situation typically observed in eukaryotes, where 5-methylcytosine is found only at positions one or two nucleotides preceding guanine residues. No DNA methylation was detected in the unique DNA flanking the zeta-eta duplication. Thus the "signal" for methylation may be the duplication itself. The numerous transition mutations in this region probably occurred by deamination of 5-methylcytosines. Our results suggest that DNA methylation can have important evolutionary consequences in eukaryotes.

DNA methylation at asymmetric sites is associated with numerous transition mutations.