When bacteriophage T7 gene 6 exonuclease is genetically removed from T7-infected cells, degradation of intracellular T7 DNA is observed. By use of rate zonal centrifugation, followed by either pulsed-field agarose gel electrophoresis or restriction endonuclease analysis, in the present study, the following observations were made. (1) Most degradation of intracellular DNA requires the presence of T7 gene 3 endonuclease and is independent of DNA packaging; rapidly sedimenting, branched DNA accumulates when both the gene 3 and gene 6 products are absent. (2) A comparatively small amount of degradation requires packaging and occurs at both the joint between genomes in a concatemer and near the left end of intracellular DNA; DNA packaging is only partially blocked and end-to-end joining of genomes is not blocked in the absence of gene 6 exonuclease. (3) Fragments produced in the absence of gene 6 exonuclease are linear and do not further degrade; precursors of the fragments are non-linear. (4) Some, but not most, of the cleavages that produce these fragments occur selectively near two known origins of DNA replication. On the basis of these observations, the conclusion is drawn that most degradation that occurs in the absence of T7 gene 6 exonuclease is caused by cleavage at branches. The following hypothesis is presented: most, possibly all, of the extra branching induced by removal of gene 6 exonuclease is caused by strand displacement DNA synthesis at the site of RNA primers of DNA synthesis; the RNA primers, produced by multiple initiations of DNA replication, are removed by the RNase H activity of gene 6 exonuclease during a wild-type T7 infection. Observation of joining of genomes in the absence of gene 6 exonuclease and additional observations indicate that single-stranded terminal repeats required for concatamerization are produced by DNA replication. The observed selective shortening of the left end indicates that gene 6 exonuclease is required for formation of most, possibly all, mature left ends.