The effect of interferon (IFN) on the replication of vaccinia DNA has been examined. Studies were carried out in infected mouse L cells grown in monolayer cultures. We examined discontinuous synthesis of small DNA fragments, ligation of the small fragments to form intermediate-sized DNA molecules, completion of unit-length DNA molecules, and introduction of crosslinks at each end of the newly replicated DNA molecules late in infection. We measured by pulse-label and pulse-chase experiments the extent of incorporation of 3H-thymidine into DNA and the conversion of small size DNA into mature and cross-linked viral DNA molecules. Interferon inhibited the initiation of viral DNA and this correlated with an overall inhibition of protein synthesis. Interferon inhibited elongation of viral DNA but this did not correlate with an inhibition of protein synthesis. The effect on elongation was not the result of increased degradation of newly synthesized DNA. It is suggested that the effects of IFN on initiation and elongation of vaccinia DNA may be the result of a decrease in the availability of enzymes or factors involved in the regulation of viral DNA synthesis.