Current hypotheses of sister chromatid exchange (SCE) formation postulate that sites of SCE induction are associated with active replicons or replicon clusters. The PCC-SCD technique has been applied to in vivo studies of mouse bone marrow cells that have been treated with cyclophosphamide (CP) for two cell cycles to determine the influence chemical inducers of SCEs such as CP may have on the pattern of replicon clusters in vivo and ascertain the possible structural and/or functional relationships between chromosomal replicons and induced SCEs. In vivo data support the existence of a subunit organization of chromosomal replication with a basic functional unit being 0.3 to 0.6 micro m in size. In addition, this chromosomal unit of replication or 'chromosomal replicon' does not seem to be functionally perturbed by the mutagen CP. It was also found that similar to chromosomal units, small SCD segments of 0.4 to 0.7 micro m in length were involved in the formation of an SCE, suggesting that both spontaneous and CP-induced SCEs occur between chromosomal replicons. These findings provide direct chromosome structural evidence to support a replicon cluster/chromosomal replicon model for SCE formation. (Copyright (c) 1989 Springer-Verlag.)