Although maize retrotransposons are recombinationally inert, the highly variable structure of maize haplotypes raises questions regarding the local effect of the polymorphic intergenic retrotransposons on recombination. To examine the effect of retrotransposon heterozygosity, we compared recombination in the same genetic interval in the presence and absence of a large intergenic retrotransposon cluster. We used for this purpose three different bz1 locus haplotypes, McC, B73, and W22, that were first introduced into the same genetic background. We analyzed recombination between markers in bz1 and the adjacent stc1 gene in McC/B73 and McC/W22 heterozygotes, in which the genetic interval differs by the presence and absence, respectively, of a 26-kb retrotransposon cluster in the intergenic region. To facilitate the genetic screen, we took advantage of Ds and Ac markers in bz1 and stc1, respectively, that allowed us to identify recombinants based on their seed pigmentation. We sequenced 239 recombination junctions and assigned them to one of the SNP-delimited intervals in the region. We found that the genetic distance between the bz1 and stc1 markers was twofold smaller in the presence of the large intergenic retrotransposon cluster. The reduction was seen in both bz1 and stc1, but no recombination occurred in the highly polymorphic intergenic region of either heterozygote. We also showed that recombination within genes shuffles flanking retrotransposon clusters, creating new chimeric haplotypes and either contracting or expanding the physical distance between markers. Our findings imply that haplotype structure will profoundly affect the correlation between genetic and physical distance for the same interval in maize.