During homologous recombination, Rad51 forms a nucleoprotein filament on single-stranded DNA to promote DNA strand exchange. This filament binds to double-stranded DNA (dsDNA), searches for homology, and promotes transfer of the complementary strand, producing a new heteroduplex. Strand exchange proceeds via two distinct three-strand intermediates, C1 and C2. C1 contains the intact donor dsDNA whereas C2 contains newly formed heteroduplex DNA. Here, we show that the conserved DNA binding motifs, loop 1 (L1) and loop 2 (L2) in site I of Rad51, play distinct roles in this process. L1 is involved in formation of the C1 complex whereas L2 mediates the C1-C2 transition, producing the heteroduplex. Another DNA binding motif, site II, serves as the DNA entry position for initial Rad51 filament formation, as well as for donor dsDNA incorporation. Our study provides a comprehensive molecular model for the catalytic process of strand exchange mediated by eukaryotic RecA-family recombinases.