Understanding the structural changes occurring in double-stranded (ds)DNA during mechanical strain is essential to build a quantitative picture of how proteins interact and modify DNA. However, the elastic response of dsDNA to tension is only well-understood for forces < 65 pN. Above this force, torsionally unconstrained dsDNA gains ∼70% of its contour length, a process known as overstretching. The structure of overstretched DNA has proved elusive, resulting in a rich and controversial debate in recent years. At the centre of the debate is the question of whether overstretching yields a base-paired elongated structure, known as S-DNA, or instead forms single-stranded (ss)DNA via base-pair cleavage. Here, we show clearly, using a combination of fluorescence microscopy and optical tweezers, that both S-DNA and base-pair melted structures can exist, often concurrently, during overstretching. The balance between the two models is affected strongly by temperature and ionic strength. Moreover, we reveal, for the first time, that base-pair melting can proceed via two entirely different processes: progressive strand unpeeling from a free end in the backbone, or by the formation of ‘bubbles' of ssDNA, nucleating initially in AT-rich regions. We demonstrate that the mechanism of base-pair melting is governed by DNA topology: strand unpeeling is favored when there are free ends in the DNA backbone. Our studies settle a long running debate, and unite the contradictory dogmas of DNA overstretching. These findings have important implications for both medical and biological sciences. Force-induced melting transitions (yielding either peeled-ssDNA or melting bubbles) may play active roles in DNA replication and damage repair. Further, the ability to switch easily from DNA containing melting bubbles to S-DNA may be particularly advantageous in the cell, for instance during the formation of RNA within transcription bubbles. Copyright © 2013 Biophysical Society. Published by Elsevier Inc. All rights reserved.