Phage phi29 from Bacillus subtilis is a paradigm of the protein-primed replication mechanism, in which a single-subunit DNA polymerase is involved in both the specific protein-primed initiation step and normal DNA elongation. To start phi29 DNA replication, the viral DNA polymerase must interact with a free molecule of the viral terminal protein (TP), to prime DNA synthesis once at each phi29 DNA end. The results shown in this paper demonstrate that the DNA polymerase-primer TP heterodimer is not dissociated immediately after initiation. On the contrary, there is a transition stage in which the DNA polymerase synthesizes a five nucleotide-long DNA molecule while complexed with the primer TP, undergoes some structural change during replication of nucleotides 6-9, and finally dissociates from the primer protein when nucleotide 10 is inserted onto the nascent DNA chain. This behaviour probably reflects the polymerase requirement for a DNA primer of a minimum length to efficiently catalyze DNA elongation. The significance of such a limiting transition stage is supported by the finding of abortive replication products consisting of the primer TP linked up to eight nucleotides, detected during in vitro replication of phi29 TP-DNA particularly under conditions that decrease the strand-displacement capacity of phi29 DNA polymerase.