We have asked whether genetic overlaps only evolve to provide extra coding capacity in genomes of restricted size. As a model system we have used the lysis gene of the RNA bacteriophage MS2. This gene overlaps with the distal part of the coat protein gene and with the proximal part of the replicase gene. Using recombinant DNA procedures we have determined whether either of the two overlaps codes for amino acids that are not essential for the function of the 75 amino acid long lysis protein. We find that the first 40 amino acids of the lysis protein are dispensable for function. Thus all of the genetic information essential to the synthesis of the active C-terminal peptide lies within the overlap with the replicase gene, whereas all dispensable residues are encoded in the overlap with the coat protein gene and in the intercistronic region. This suggests that the overlap with the coat protein gene is not required for extra coding capacity but serves to regulate the expression of the lysis gene. Comparative sequence analysis is consistent with this idea.