Transcription of the supercoiled form (I) and the relaxed circular form (II) of bacteriophage PM2 DNA was studied utilizing the DNA-dependent RNA polymerase from its host, Pseudomonas BAL-31. Transcription of both templates is continuous for up to 2 hr, but proceeds at a two-fold higher rate on I than on II. This difference is mainly due to a 2.2-fold higher rate of chain initiation on I. When rifampicin (Rif) is added ater 10 min of synthesis, (1) transcription of II ceases by 30 min with a maximum product length of 7000 nucleotides (number average) being produced; (2) transcription of I continues with little rate reduction and with the product reaching 16,000 nucleotides (number average) by 2 hr. Sucrose gradient analysis shows that the product of II achieves maximum size 20 min after Rif addition and sediments in three peaks of 24, 33, and 39 S (approximately one-third, two-thirds, and one genome lengths). The product of I has a heterogeneous distribution and grows continuously with a large fraction reacting greater than 3 genome lengths by 90 min. The same differences in synthesis kinetics, Rif inhibition, and product size distribution are observed when I and II are transcribed by Escherichia coli RNA polymerase. These experiments show that (i) PM2 form I DNA is transcribed mainly by a process of continuous chain elongation, with little chain termination occurring; (ii) PM2 form II is transcribed by a process of continuous chain initiation, elongation, and termination of yield discrete products. Thus, the tertiary structure of circular DNA influences chain termination by RNA polymerase.