Chloroplast DNA replication in Chlamydomonas reinhardtii is initiated by the formation of a displacement loop (D-loop) at a specific site. One D-loop site with its flanking sequence was cloned in recombinant plasmids SC3-1 and R-13. The sequence of the chloroplast DNA insert in SC3-1, which includes the 0.42-kilobase (kb) D-loop region, as well as 0.2 kb to the 5' end and 0.43 kb to the 3' end of the D-loop region, was determined. The sequence is A+T-rich and contains four large stem-loop stuctures. An open reading frame potentially coding for a polypeptide of 136 amino acids was detected in the D-loop region. One stem-loop structure and two back-to-back prokaryotic-type promoters were mapped within the open reading frame. The 5.5-kb EcoRI fragment cloned in R-13 contains the 1.05-kb SC3-1 insert and its flanking regions. A yeast autonomously replicating (ARS) sequence and an ARC sequence, which promotes autonomous replication in Chlamydomonas, have been mapped within the flanking regions [Vallet, J.-M. & Rochaix, J.-D. (1985) Curr. Genet. 9, 321-324]. Both R-13 and SC3-1 were active as templates in a crude algal preparation that supports DNA synthesis. In this in vitro system, chloroplast DNA synthesis initiated near the D-loop site.