One-Wire mode is enabled by setting the Loop-Back Mode Enable (LBME) bit in the USARTn.CTRLA register. This will enable an internal connection between the TXD pin and the USART receiver, making the TXD pin a combined TxD/RxD line. The RXD pin will be disconnected from the USART receiver and may be controlled by a different peripheral.
In One-Wire mode, multiple devices can manipulate the TxD/RxD line at the same time. In the case where one device drives the pin to a logical high level (VCC), and another device pulls the line low (GND), a short will occur. To accommodate this, the USART features an Open-Drain mode (the ODME bit in the USARTn.CTRLB register), which prevents the transmitter from driving a pin to a logical high level, thereby constraining it to only be able to pull it low. Combining this function with the internal pull-up feature (the PULLUPEN bit in the PORTx.PINnCTRL register) will let the line be held high through a pull-up resistor, allowing any device to pull it low. When the line is pulled low, the current from VCC to GND will be limited by the pull-up resistor. The TXD pin is automatically set to output by hardware when the Open-Drain mode is enabled.
When the USART is transmitting to the TxD/RxD line, it will also receive its transmission. This can be used to detect overlapping transmissions by checking if the received data are the same as the transmitted data.