It is well known that material and energy recycle may have a profound influence on the plant dynamics. Previous studies have shown that the introduction of recycle typically increases the dominant time-constant and disturbance sensitivity of the plant. In this work we consider the effect of recycle on the zero dynamics and show that recycle may introduce severe overshoots and inverse responses. Sufficient conditions for the existence of nonminimum phase transmission zeros caused by the presence of recycle are derived. The conditions may be evaluated based on steadystate information about the individual units only. The results are illustrated through application to a reactor-separator system.