We have developed a simple and efficient method for in vitro mutagenesis and recombination of polynu-cleotide sequences. The staggered extension process (StEP) consists of priming the template sequence(s) followed by repeated cycles of denaturation and extremely abbreviated annealing/polymerase-catalyzed extension. In each cycle the growing fragments anneal to different templates based on sequence complementarity and extend further. This is repeated until full-length sequences form. Due to template switching, most of the polynucleotides contain sequence information from different parental sequences. The method is demonstrated by the recombination of two genes encoding thermostable subtilisins carrying two phenotypic markers separated by 113 base pairs and eight other point mutation markers. To demonstrate its utility for directed evolution, we have used StEP to recombine a set of five thermostabilized subtilisin E variants identified during a single round of error-prone PCR mutagenesis and screening. Screening the StEP-recombined library yielded an enzyme whose half-life at 65°C is 50 times that of wild-type subtilisin E.