Replication of bacteriophage T7 DNA initiates in vivo at an origin located 15% of the distance from the genetic left end of the chromosome. Bidirectional DNA synthesis from this site results in complete replication of the chromosome. The combination of T7 RNA polymerase, T7 DNA polymerase, and T7 gene 4 protein initiates DNA synthesis in vitro within the cloned origin sequence (Fuller, C. W., and Richardson, C. C. (1985) J. Biol. Chem. 260: 3185-3196). DNA synthesis is primed by T7 RNA polymerase transcripts, and proceeds in the same direction (rightward) as transcription to yield partially replicated Y-form DNA molecules. The DNA product of in vitro synthesis (Y-form DNA) has been characterized by electron microscopic, sedimentation, and gel electrophoretic analyses. These studies show that Y-form DNA is the product of unidirectional replication of both leading and lagging strands from the origin to the right-hand end of the template. The inclusion of either Escherichia coli single-stranded DNA-binding protein or the functionally similar T7 gene 2.5 protein results in marked stimulation of bidirectional synthesis. Studies using purified Y-form DNA provide direct evidence that this species is an intermediate in the complete replication of the linear template. Purified Y-form DNA is converted to linear DNA in a reaction catalyzed by T7 DNA polymerase, T7 gene 4 protein, and single-stranded DNA-binding protein. Y-form DNA is a competent, transient intermediate during the bidirectional replication of linear DNA molecules and DNA-binding protein is essential to initiate leftward synthesis.