The T7gene-4 protein has been purified to near homogeneity using a complementation assay in vitro, and it is designated T7 DNA-priming protein (DNA primase). The purified enzyme enables T7 DNA polymerase to initate DNA synthesis on various circular single-stranded DNA templates by a mechanism which involes the synthesis of a very short RNA primer. The oligoribonucleotide, which is linked to the product DNA via a 3':5'-phosphodiester bond, starts with pppA-C and terminates predominantly with AMP. When only ATP and CPT are precursors, the RNA primer is found to be primarily a tetranucleotide of the sequence pppA-C-C-A. Using oligoribonucleotides in place of ribonucleoside triphosphates as chain initators, T7 DNA-priming protein drastically increases the efficiency with which T7 DNA polymerase can utilize particular tetranucleotide primers containing A and C residues. T7 DNA-priming protein also enables T7 DNA polymerase to make use of native or nicked duplex T7 DNA as template-primer. This reaction does not require ribonucleoside triphosphates, although their addition enhances DNA synthesis 2--4 fold. The product formed in their absence is covalently attached to the template DNA and is found to contain a few long branches when examined by electron microscopy. In the presence of ribonucleoside triphosphates most of the newly made product arises from imitation of DNA chains de novo. Incubation of three proteins: T7 DNA-priming protein, T7 DNA polymerase, and T7 DNA-binding protein, with ribonucleoside and deoxyribonucleoside triphosphates, and with phiX174DNA as template leads to the generation of 'rolling circle-like' structures as visualized in the electron microscope. Single-stranded regions at the tail-circle junction indicate that initations can occur de novo on the displaced complementary strand. This is consistent with a discontinuous mode of 'lagging' strand synthesis and suggests that the same proteins may also be responsible for fork propagation in vivo.