The formation of crown gall tumours involves the transfer of the T-DNA region of the Ti plasmid from Agrobacterium to plant cells and its subsequent integration into plant chromosomes. When agrobacteria are incubated with plant protoplasts or exudates of plants, the T-DNA region is circularized by recombination or cleavage and rejoining between the 25 bp terminal repeats; the formation of circular T-DNAs is thought to be one step in T-DNA transfer (Koukolikova-Nicola et al. 1985; Machida et al. 1986). We previously showed that the virulence region of the Ti plasmid is required for T-DNA circularization. In the present paper, we examined the circularization event in agrobacteria harbouring octopine Ti plasmids with mutations in various loci of the virulence region. The results clearly demonstrate that the gene(s) encoded in the virD locus are necessary for T-DNA circularization. In particular, the gene(s) present in the region proximal to the virD promoter are essential. We propose that product(s) of this gene have recombinase or endonuclease activity which specifically recognizes the 25 bp terminal repeats of T-DNA.