The DNA polymerase and gene 4 protein of phage T7, in the presence of helix-destabilizing protein (DNA binding protein), catalyze DNA synthesis on duplex templates. As has been previously shown (Kolodner, R. D., and Richardson, C. C. (1978) 4. Biol. Chem. 253, 574-584), in the absence of ribonucleoside 5'-triphosphates DNA synthesis is initiated at nicks, and all of the newly synthesized DNA is covalently attached to the template. In this paper we characterize the DNA synthesized in the presence of ribonucleoside 5'-triphophates and show that, in contrast, the major portion of the newly synthesized DNA is not attached to the template, having an average chain length of 5000 to 6000 nucleotides. In addition, each chain of newly synthesized DNA is terminated at its 5'-end by a covalently attached tetranucleotide RNA primer whose sequence is predominantly pppApCpCpC and pppApCpCpA. The results of isotope transfer experiments are in agreement with the number of initiation events determined by the incorporation of [gamma-32P]ATP and indicate that each of the four deoxyribonucleotides is present at the RNA-DNA junction.