DNA palindromes are rare in humans but are associated with meiosis-specific translocations. The conserved Mre11/Rad50/Nbs1 (MRN) complex is likely directly involved in processing palindromes through the homologous recombination pathway of DNA repair. Using the fission yeast Schizosaccharomyces pombe as a model system, we show that a 160-bp palindrome (M-pal) is a meiotic recombination hotspot and is preferentially eliminated by gene conversion. Importantly, this hotspot depends on the MRN complex for full activity and reveals a new pathway for generating meiotic DNA double-strand breaks (DSBs), separately from the Rec12 (ortholog of Spo11) pathway. We show that MRN-dependent DSBs are formed at or near the M-pal in vivo, and in contrast to the Rec12-dependent breaks, they appear early, during premeiotic replication. Analysis of mrn mutants indicates that the early DSBs are generated by the MRN nuclease activity, demonstrating the previously hypothesized MRN-dependent breakage of hairpins during replication. Our studies provide a genetic and physical basis for frequent translocations between palindromes in human meiosis and identify a conserved meiotic process that constantly selects against palindromes in eukaryotic genomes.