The long DNA molecules of eukaryotic genomes appear to be organized into large loops formed by the binding of dispersed DNA sequences to non-histone proteins. This partitioning of DNA into topologically constrained units constitutes one of the highest orders of DNA packing in chromosomes. DNA loops are likely to define functional units as well as topological domains, contributing to the regulation of gene expression and DNA replication. This review presents recent work on the properties of the DNA sequences and proteins thought to be involved in loop formation, and on their possible significance for replication and transcription.