Most yeast strains harbor extrachromosomal 2-micrometer DNA, and this DNA synthesis, like nuclear DNA replication, is strictly under cell cycle control. A soluble extract of yeast Saccharomyces cerevisiae carries out semiconservative replication of added 2-micrometer DNA and Escherichia coli chimeric plasmids containing the 2-micrometer DNA. Replication is initiated on 10% of the DNA, and one round of replication is completed. The major products in early stages of replication are theta ("eye") forms which originate 140 +/- 50 nucleotides within one of the 599-base-pair inverted repeats of 2-micrometer DNA. Their replication is bidirectional and discontinuous. Extracts prepared from the cell division cycle mutant cdc8 show temperature-sensitive 2-micrometer DNA synthesis in vitro, suggesting that this in vitro system resembles in vivo 2-micrometer plasmid DNA replication. This system should provide a useful assay for the purification and characterization of yeast DNA replication proteins.