Sequence diversity at the junctions of Ig genes differs between newborn and adult mice in two respects: 1) fetal/newborn Ig lack N regions; and 2) these N- junctional sequences very often contain 1 to 6 nucleotides that could have been encoded by either of the two joined gene segments. We address the hypothesis that such short homologies preferentially direct recombination to that site, and we analyze the effect of such homology-directed recombination upon the neonatal Ig repertoire. We examined 546 CDR3 sequences that were generated from polymerase chain reaction-amplified DNA from fetal and newborn liver using primers from three different VH families: S107, 7183, and J558. All junctional sequences using 14 frequently occurring IgH V-D and D-J gene combinations were analyzed. In 12 of the 14 combinations analyzed, there were 1 to 3 short sequence homologies, and the junctional sequences that would be created by those homologies were observed with high frequency. The D-J junctions often had two to three predominant junctional sequences, whereas the V-D junctions had one dominant junctional sequence. The only exceptions were the VHJ558-D junctions, where homology-directed recombination using the sequence homology between VHJ558 genes and most D genes would result in an out-of-frame join, and most of our sequences were productive. This latter result further suggests that homology-directed recombination may play a role in the nonrandom VH gene usage observed in fetal and newborn mice. Thus, most neonatal IgH junctions show limited diversity, not only due to the lack of N regions, but also because of nonrandom junctional sequences. Inasmuch as the few adult N- junctions also show a high frequency of homology-directed junctional sequences, V-D-J recombination throughout life may involve pairing via short homologies, with addition of N regions obscuring its role in the formation of adult IgH junctions.