In a screen for unexplained mutation events we identified a previously unrecognized mechanism generating clustered DNA polymorphisms such as microindels and cumulative SNPs. The mechanism, short-patch double illegitimate recombination (SPDIR), facilitates short single-stranded DNA molecules to invade and replace genomic DNA through two joint illegitimate recombination events. SPDIR is controlled by key components of the cellular genome maintenance machinery in the gram-negative bacterium Acinetobacter baylyi. The source DNA is primarily intragenomic but can also be acquired through horizontal gene transfer. The DNA replacements are nonreciprocal and locus independent. Bioinformatic approaches reveal occurrence of SPDIR events in the gram-positive human pathogen Streptococcus pneumoniae and in the human genome.