Recent findings in purified systems demonstrate the universality of DNA polymerase-primase complexes which may function in the priming and continuation of eucaryotic DNA replication. In this report we characterize an in vitro, nuclear matrix-associated, priming and continuation system that can utilize either endogenous matrix-bound DNA or exogenous single-stranded DNA as template. 30-40% of total nuclear DNA primase activity was recovered in association with the isolated nuclear matrix fraction from regenerating rat liver. Matrix-bound primase catalyzed the alpha-amanitin, actinomycin D-resistant synthesis of oligonucleotide chains of 8-50 nucleotides on the endogenous template. At least a portion of the RNA primers were continued by DNA polymerase alpha with deoxynucleoside triphosphate incorporation up to 300-600 nucleotides. Nearest neighbor analysis revealed ribodeoxynucleotide covalent linkages in these RNA-DNA chains. The matrix-bound primase preferred single-stranded fd DNA as exogenous template over synthetic homopolymers and was strictly dependent on the presence of ribonucleoside triphosphates. Appropriate subfractionation revealed that the matrix-bound primase activity is exclusively localized in the nuclear matrix interior. The ability of primase and DNA polymerase to synthesize covalently linked RNA-DNA products demonstrates the potentially useful role of the nuclear matrix in vitro system for elucidating the organizational and functional properties of the eucaryotic replication apparatus in the cell nucleus.