We demonstrate that S1 nuclease converts supercoiled plasmid DNA to unit-length, linear dsDNA through the creation of a single, double-stranded break in a plasmid molecule. These double-stranded breaks occur not only in the origin of replication near inverted repeats but also at a wide variety of locations throughout the plasmid. S1 nuclease exhibits this activity under conditions typically employed for the nuclease's single-stranded nuclease activity. Thus, S1 nuclease digestion of plasmid DNA, unlike analogous digestion with DNaseI, effectively halts after the first double-stranded break. This property makes easier the construction of large domain insertion libraries in which the goal is to insert linear DNA at a variety of locations throughout a plasmid. We used this property to create a library in which a circularly permuted TEM1 β-lactamase gene was inserted throughout a plasmid containing the gene encoding Escherichia coli ribose binding protein. Gene fusions that encode allosteric switch proteins in which ribose modulates β-lactamase catalytic activity were isolated from this library using a combination of a genetic selection and a screen. Biotechnol. Bioeng. 2011;108: 2535–2543. © 2011 Wiley Periodicals, Inc.