A previously described, autonomously replicating plasmid was examined for its ability to replicate in the plant pathogenic fungus, Nectria haematococca (Nh). The plasmid, pFOLT4R4, replicates as a linear molecule, contains a subterminal inverted repeat, as well as the repeated hexanucleotide telomere consensus sequence, TTAGGG, at both ends, and increases frequency of fungal transformation approximately 100-fold compared to a similar integrative plasmid, pHRC. Transformation of Nh occurs by way of autonomous replication; the transformed, hygromycin B-resistant (HyR) phenotype is unstable without selection and in most cases pFOLT4R4 is maintained in the fungus, separate from chromosome-sized DNAs. Surprisingly, a non-autonomously replicating derivative of pFOLT4R4 (called pLD), lacking the subterminal inverted repeat and having the 5'-TTAGGG repeat in only one direction on the plasmid, transformed Nh at a rate as high as pFOLT4R4. Therefore, autonomous replication and high-frequency transformation are separable phenomena in Nh. In pLD transformants, plasmid sequences are integrated into chromosome-sized DNAs of Nh and these cultures generally have a stable HyR phenotype. Treatments involving ligation of Nh genomic DNA to pLD result in a lower frequency of transformation. In many cultures transformed with pLD plus genomic DNA, one wild-type chromosome-sized band is not visible, but another smaller chromosome-sized band is found. Mobility changes in some cases are consistent with deletions of over 1000 kb. Some HyS revertants of transformants appear to lack the entire chromosome into which integration had occurred. These results indicate that the Nh genome is extremely malleable and large portions may be non-essential for growth in culture.