We have examined the replication and segregation of the Saccharomyces cerevisiae 2 microns circle. The amplification of the plasmid at low copy numbers requires site-specific recombination between the 2 microns inverted repeat sequences catalyzed by the plasmid-encoded FLP gene. No other 2 microns gene products are required. The overexpression of FLP in a strain carrying endogenous 2 microns leads to uncontrolled plasmid replication, longer cell cycles, and cell death. Two different assays show that the level of Flp activity decreases with increasing 2 microns copy number. This regulation requires the products of the REP1 and REP2 genes. These gene products also act together to ensure that 2 microns molecules are randomly segregated between mother and daughter cells at cell division.