Two DNA hairpin motifs (5'-GCGAAGC-3' and 5'-ACGA AGT-3'), both stabilized by a 5'-GAA loop, have been used to design novel intramolecular double hairpin structures (5'-GCGAAGCACGAAGT-3' and 5'-ACGAAGTGCG AAGC-3') in which coaxial stacking of the two hairpin components generates a double-stranded stem region effectively with a single-strand break in the middle of the sequence at either the TG or CA step between unconnected 3' and 5' terminal bases. We have investigated by NMR the conformation and dynamics of the DNA at the strand break site. We show that mutual stacking significantly enhances the stability of each hairpin. Further, the anthracycline antibiotic nogalamycin binds cleanly to the 5'-TG (5'-CA) site formed by the mutually stacked hairpins despite the break in the sugar-phosphate backbone on one strand. The complex resembles the structure of nogalamycin-DNA complexes with the drug bound at 5'-TG sites in intact duplex sequences, with pi-stacking interactions probably the single dominant stabilizing interaction.