DNA polymerase and gene 4 protein of bacteriophage T7 catalyze extensive DNA synthesis on duplex phage T7 or PM2 DNA templates containing single strand breaks. A variety of physicochemical techniques have been used to characterize the DNA product synthesized in this reaction in the absence of ribonucleoside 5'-triphosphates. Pyknographic and sedimentation analyses reveal that all of the newly synthesized DNA is covalently attached to the template DNA. Analysis by electron microscopy shows the major portion of the product molecules synthesized on duplex T7 DNA templates to consist of a double-stranded branch attached to an intact template molecule. Using PM2 DNA templates, the predominant product consists of a double-stranded branch attached to the circular PM2 DNA template. Analyses of these product molecules indicate that DNA synthesis by the gene 4 protein and T7 DNA polymerase is initiated at single strand breaks in the duplex DNA and that synthesis is accompanied by extensive displacement of one of the parental strands. At later times in the reaction, a portion of the 3'-hydroxyl terminus of the newly synthesized DNA is displaced from the template by branch migration and is used as a primer by the DNA polymerase to copy the displaced 5' single-stranded parental strand to form a duplex branch.