An enzyme system with requirements similar to those for replication of phage fd replicative form (RF) DNA in bacteriophage fd-infected cells has been reconstituted with purified fd gene 2 protein, and DNA polymerase III holoenzyme, DNA binding protein I and rep-protein (rep-helicase) of Escherichia coli. The system generates viral circular single strands, which are infective for E. coli spheroplasts. Parental and newly synthesized DNA are covalently connected in early stages of replication, as expected for DNA replication using the rolling circle mechanism. Single-stranded tails of the rolling circle intermediates are cleaved after a full round of replication by gene 2 protein and circularized by the same enzyme molecule.