We describe a convenient method for constructing new plasmids that relies on interchanging parts of plasmids by homologous recombination in Saccharomyces cerevisiae. A circular recombinant plasmid of a desired structure is regenerated after transformation of yeast with a linearized plasmid and a DNA restriction fragment containing appropriate homology to serve as a substrate for recombinational repair. The free ends of the input DNA molecules need not be homologous in order for efficient recombination between internal homologous regions to occur. The method is particularly useful for incorporating into or removing from plasmids selectable markers, centromere or replication elements, or particular alleles of a gene of interest. Plasmids constructed in yeast can subsequently be recovered in an Escherichia coli host. Using this method, we have constructed an extended series of new yeast centromere, episomal and replicating (YCp, YEp, and YRp) plasmids containing, in various combinations, the selectable yeast markers LEU2, HIS3, LYS2, URA3 and TRP1.