Using lacl-Z fusion strains of Escherichia coli we have devised systems that detect deletions of varying lengths. We examined deletions 700–1000 base pairs long, and genetically characterized over 250 spontaneous deletions. Of these, we analyzed 24 by direct DNA sequencing and 18 by inspection of restriction fragment patterns. Deletions of this size occur almost exclusively at short repeated sequences in both recA⁺ and recA⁻ strain backgrounds, but are detected 25-fold more frequently in a recA⁺ background. The frequency of deletion formation correlates with the extent of homology between the short repeated sequences, although other factors may be involved. The largest hotspot, which accounts for 60% of the deletions detected, involves the largest homology in the system (14 of 17 base pairs). Altering a single base pair within this homology reduces deletion incidence by an order of magnitude. We discuss possible mechanisms of deletion formation and consider its relationship to the excision of transposable elements.