In bacterial cells, processing of double-stranded DNA breaks for repair by homologous recombination is dependent upon the recombination hotspot sequence chi (Chi)(1,2) and is catalysed by either an AddAB-or RecBCD-type helicase-nuclease (reviewed in refs 3, 4). These enzyme complexes unwind and digest the DNA duplex from the broken end until they encounter a chi sequence(5), whereupon they produce a 3' single-stranded DNA tail onto which they initiate loading of the RecA protein(6). Consequently, regulation of the AddAB/RecBCD complex by chi is a key control point in DNA repair and other processes involving genetic recombination. Here we report crystal structures of Bacillus subtilis AddAB in complex with different chi-containing DNA substrates either with or without a non-hydrolysable ATP analogue. Comparison of these structures suggests a mechanism for DNA translocation and unwinding, suggests how the enzyme binds specifically to chi sequences, and explains how chi recognition leads to the arrest of AddAB (and RecBCD) translocation that is observed in single-molecule experiments(7-9).