We discuss the possible role of reconnection in electro-magnetically dominated cores of relativistic AGN jets. We suggest that reconnection may proceed in a two-fold fashion: initial explosive collapse on the Alfven time-scale of a current-carrying jet (which is of the order of the light crossing time) and subsequent slow quasi-steady reconnection. Sites of explosive collapse are associated with bright knots, while steady-state reconnection re-energizes particles in the ``bridges'' between the knots. Ohmic dissipation in reconnection layers leads to particle acceleration either by inductive electric fields or by stochastic particle acceleration in the ensuing electro-magnetic turbulence.