Although DNA replication is a process common in all domains of life, primase and replicative DNA polymerase appear to have evolved independently in the bacterial domain versus the archaeal/eukaryal branch of life. Here, we report on a new type of replication protein that constitutes the first member of the DNA polymerase family E. The protein ORF904, encoded by the plasmid pRN1 from the thermoacidophile archaeon Sulfolobus islandicus, is a highly compact multifunctional enzyme with ATPase, primase and DNA polymerase activity. Recombinant purified ORF904 hydrolyses ATP in a DNA-dependent manner. Deoxynucleotides are preferentially used for the synthesis of primers approximately 8 nucleotides long. The DNA polymerase activity of ORF904 synthesizes replication products of up to several thousand nucleotides in length. The primase and DNA polymerase activity are located in the N-terminal half of the protein, which does not show homology to any known DNA polymerase or primase. ORF904 constitutes a new type of replication enzyme, which could have evolved independently from the eubacterial and archaeal/eukaryal proteins of DNA replication.