Mu and D108 are related, temperate, transposable coliphages with unusual modes of DNA replication (transposition) and virion DNA maturation. These double-stranded DNA genomes replicate intrachromosomally and are matured and encapsidated linked to DNA sequences flanking the dispersed, integrated phage genomes. We have developed an in vitro system that employs crude lysates prepared from cells late in the Mu lytic cycle and that is proficient for both maturation and encapsidation of D108 DNA. Different forms of phage DNA were packaged at different efficiencies, with a circular pSC101::D108cts10 plasmid being most efficient, linearized plasmid less so, and mature virion DNA a poor substrate. The addition of purified D108 Ner protein to the reaction had no effect, whereas D108 repressor (c protein) inhibited the reaction. Escherichia coli integration host factor and D108 transposase proteins exerted an inhibitory effect on circular DNA substrates but had little effect on linear DNA packaging. This in vitro system, coupled with that developed for transposition, can now be used to biochemically dissect the protein and substrate requirements of these phages' DNA maturation pathway and the nature of the molecular switch between DNA transposition and encapsidation.